US Hiring Plummets: A 13-Year Low Amidst Economic Growth

In January 2026, the United States reported a hiring rate of just 3.3%, a level not seen in 13 years and equivalent to the 2020 crisis. Payroll growth in 2025 reached fewer than 600,000 jobs, a drastic reduction from the prior decade's annual average of 1.9 million. The unemployment rate stands at 4.4%, indicating a significant slowdown in labor demand despite overall economic expansion.

This divergence between a growing GDP and a stagnant job market is causing concern. Companies are hesitant to hire due to factors like high interest rates and a focus on efficiency, leading to fewer job openings. For workers, this means the era of easily switching jobs is over, and opportunities for new graduates are particularly scarce.

Economists are increasing their recession probability estimates for 2026, fearing that low hiring will eventually curb consumer spending. Traditional economic indicators are not signaling a recession, but the combination of low job creation and a gradually rising unemployment rate suggests underlying stress. Federal Reserve policymakers are monitoring these trends, debating the effectiveness of monetary policy in addressing structural labor market issues.

Young workers and new graduates face diminished prospects, with entry-level positions scarce. This situation is exacerbated by automation and AI efficiency gains reducing the need for expanded workforces. The focus is shifting from job quantity to job quality and sustainability, as the labor market navigates unprecedented territory in 2026.