The job market may be at a tipping point

"State of play: The unemployment rate has remained in a narrow range between 4% and 4.3% for 16 consecutive months. But that apparent stability masks change beneath the surface. Employers to this point have cut back on the rate at which they hire new workers, but to date have not meaningfully increased the rate at which they fire people, which has remained near historic lows."

"Executives and economists have attributed this to a combination of continued strong demand - fueled by the AI investment boom, a surging stock market and tax cuts - and the remnants of the post-pandemic period, when labor was scarce and employers were hoarding workers. Workers themselves see the labor market in starkly negative terms, a low unemployment rate notwithstanding, including in consumer confidence numbers released Tuesday. By the numbers: There were only 0.98 job openings for each unemployed American in August."

Sluggish hiring has left the labor market vulnerable to deterioration from a relatively small increase in layoffs. Several large companies implemented cuts: Amazon announced 14,000 corporate layoffs, UPS eliminated 48,000 jobs via buyouts and layoffs, and Paramount Skydance began with 1,000 cuts. The unemployment rate has stayed between 4% and 4.3% for 16 months, but hiring has slowed while separations remain near historic lows. Strong demand driven by AI investment, a rising stock market, and tax cuts, along with post-pandemic labor scarcity and employer hoarding, have supported employment. Worker sentiment and consumer confidence have weakened. Job openings fell to 0.98 per unemployed American in August, down from a peak above 2 and below the pre-pandemic 1.2.

Read at Axios