Recent labor market data presents a mixed picture, leaving economists puzzled about the true state of the economy. Initial unemployment claims dropped to a seven-month low, released a day early ahead of the Thanksgiving holiday. Yet this positive signal contrasts with ADP’s private payroll report indicating rising job losses, alongside September’s stronger-than-expected employment figures. This inconsistency has led analysts to describe the current environment as one of stagnation—neither robust hiring nor widespread layoffs. Allison Shrivastava of the Indeed Hiring Lab noted that employers are neither expanding nor downsizing significantly. While this might suggest stability, she cautioned that it doesn’t reflect the struggles of those actively seeking work, especially given the average job search now lasts six months. Workers in certain sectors, such as healthcare, face better prospects, but many others encounter limited opportunities. Jesse Rothstein from UC Berkeley admitted to reduced confidence in forecasting due to the unclear signals. Traditional indicators, like youth employment trends, are no longer reliable barometers. Meanwhile, Harry Holzer of Georgetown University pointed to a range of conflicting policy changes—tax reforms, tariffs, federal staffing cuts, and immigration enforcement—that continue to influence labor dynamics. According to Shrivastava, businesses need greater predictability before committing to growth. She emphasized that certainty isn’t immediate but must be established through consistent, long-term policies.
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Mixed job market signals point to confused economy
With tomorrow being Thanksgiving and all, first-time unemployment filings came in Wednesday, a day early. Weekly claims came in at a seven-month low. n nPit that against private payroll data out Tuesday from ADP saying job loss has picked up, and the September jobs report out last week giving better-than-expected numbers, and the job market seems kind of all over the place. n nA phrase that’s been used to describe this job market is low-hire, low-fire. n nAllison Shrivastava, an economist at the Indeed Hiring Lab, said employers aren’t expanding or contracting. “And while that’s true, I think that’s a little deceptive because it sounds very chilled out, right?” she said. n nChilled out. Try telling that to someone who’s unemployed and has been filling out applications for six months (the length of an average job search these days, said Shrivastava). Try telling that to a worker who’s unhappy but doesn’t see many job openings to apply for. n nThe truth is, the job market is only “chilled out” if you’re in one of a few industries. n n“You’re probably pretty chill if you’re looking for a job in health care,” she said. It’s one area contributing to job growth. n nNow, all this stillness is unusual. A low-hire job market tends to go with a high unemployment rate. The last measure was relatively low, at 4.4%. n nJesse Rothstein, an economist at the University of California, Berkeley, said this stall out makes predicting the future difficult. n n“I have less-than-usual confidence that I understand what’s going on just because it’s hard to parse what’s going on,” he said. n nEven Rothstein’s go-to indicators are messy. For instance, he’d usually look at how younger workers are doing, as they tend to be the canary in the coal mine, so to speak. n n“The canary isn’t doing great, but is that because of AI or is that because just overall the labor market is weakening?” he said. n nMeanwhile, new policies that influence the labor market are a mixed bag, said Harry Holzer, an economist at Georgetown University. n n“Things have to calm down a little bit,” he said. n nNew tax laws, tariffs, federal workforce reductions, immigration crackdowns. “As long as all of those factors are bubbling and moving in different directions we might stay in this place for a while,” Holzer said. n nFor employers to feel confident in expanding their businesses and hiring, they need to feel more certain about the future, said Shrivastava at Indeed. n n“You can’t wake up tomorrow with certainty. Certainty has to be kind of built in,” she said. n nBuilding in certainty requires policy consistency. And by definition, consistency requires time.