On the surface, the United States labour market seems to be holding steady. The unemployment rate is under 5%, mass layoffs are not happening, and companies are still adding jobs, albeit slowly. However, a deep-seated crisis of confidence is brewing among American workers, shaking a fundamental belief of the economy: the assurance that losing a job means you can find another one.
The Crumbling Faith of the American Worker
This foundational faith is now at its weakest point in over ten years. According to the Federal Reserve Bank of New York’s Survey of Consumer Expectations, the probability that Americans believe they could secure a new job plummeted to a record low of 43.1% in December. This survey, which has tracked household sentiment since 2013, also found that fear of losing one's own job climbed to its highest average level since the first quarter of 2025. Simultaneously, the willingness to voluntarily quit a job dropped to its lowest point since mid-2023.
The underlying story is one of workers feeling trapped. They are less hopeful about career advancement, less inclined to switch roles, and increasingly anxious about what the future holds for their employment.
A Market Frozen in Place: The 'Low-Hire, Low-Fire' Trap
Economists describe the current environment as a "low-hire, low-fire" equilibrium. Businesses are not firing workers aggressively, but they are also not hiring in significant numbers. The result is a labour market that looks stable on the surface but is quietly stagnating. This slowdown has been building for months, with US hiring activity falling to levels last seen during past recessions, if we exclude the pandemic shock of 2020.
This caution stems from extreme uncertainty. Sweeping shifts in trade policy, volatile immigration flows, and broader geopolitical tensions have caused business investment to stall. Employers are simply reluctant to commit to expanding their payrolls.
The consequences of this stagnation are already visible. Long-term unemployment is creeping higher, and wage growth has cooled significantly. For lower- and middle-income households, this translates into smaller pay raises, fewer opportunities to switch to better-paying jobs, and a widening gap between those secure in their positions and those feeling vulnerable.
Behind the Headlines: An Uneven and Concerning Slowdown
The upcoming December jobs report from the Bureau of Labor Statistics is highly anticipated. Estimates suggest payrolls grew by around 55,000 last month, consistent with the subdued pace of 2025. Some economists think seasonal holiday hiring might push that number above 100,000, and the unemployment rate may dip to 4.5%.
However, economists warn that these figures could be misleading. Even a strong December report would not alter the larger, worrying trend. Excluding the pandemic-distorted year of 2020, employment growth in 2025 was the weakest the US has seen in decades. The labour market is not collapsing; it is hardening, or calcifying.
The most troubling feature of this slowdown is its uneven nature. Job growth has been concentrated in just two sectors: health care and leisure & hospitality. Together, these sectors make up about 22% of total US employment but were responsible for a staggering 84% of all net job gains from January through November 2025. For the remaining 78% of the workforce—encompassing manufacturing, construction, professional services, retail, and technology—job creation has been scarce or has even declined.
This imbalance worsened after April 2025, when expansive new tariffs were announced. Business sentiment deteriorated sharply afterwards, causing hiring plans to be shelved and capital spending to slow. From April through November, job growth in health care and leisure alone exceeded the net jobs added across the entire economy, highlighting how frozen hiring was elsewhere.
Fresh Data Confirms the Trend
New evidence from the Job Openings and Labor Turnover Survey (JOLTS) for November confirmed the trend. Job openings declined again, and the hiring rate fell to its lowest level in over a decade (outside the pandemic period). Layoffs and voluntary quits remained low. Workers, sensing few alternatives, are staying put. Employers, uncertain about future demand, are doing the same. The labour market is effectively locked in place.
The danger of this moment is not a sudden spike in unemployment but a slower, more corrosive outcome: lost career mobility, stalled wages, and deepening economic inequality. When workers no longer believe they can move up or move on, the dynamism that fuels economic growth erodes. The New York Fed's record-low reading on job-finding expectations is more than just a statistic; it is a stark signal of eroding confidence in an economy where opportunity feels increasingly out of reach. For now, the market is holding together, but hope, it seems, is slipping away.
