This Is Why It’s So Hard to Find a Job Right Now

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This Is Why It’s So Hard to Find a Job Right Now

A ‘deep freeze’ has enveloped the U.S. labor market. A whole bunch of factors are at play.

By Justin Lahart, WSJ

Feb. 8, 2026 5:30 am ET

The pace of hiring in America has dropped precipitously, and there isn’t a single reason why.

Instead, there are a lot of them.

Uncertainty over tariff policy has made it difficult for many companies to plan ahead, leading them to hold off on hiring. For some—particularly small businesses—tariffs have raised costs, making it more difficult to take on new employees.

High short-term interest rates are another pressure, particularly for smaller firms, which often rely on credit card borrowing to meet financing needs. Tech companies that hired heavily in the wake of the pandemic are still dealing with an overhang of workers.

Another factor: Workers aren’t leaving the jobs they have. The number of jobs people quit in December came to 3.2 million, the Labor Department reported Thursday, well below the 4.5 million hit in March 2022, when postpandemic hiring was in full swing. The quits rate, which measures quits as a share of employment, was 2%, well short of the 2.3% it averaged in 2019, before the pandemic.

All this matters because the bulk of hiring in any given month is replacing people who have left.

“We’re in a deep freeze when it comes to the labor market,” said Gregory Daco, chief economist at EY-Parthenon.

The Labor Department on Thursday reported that the overall number of hires employers made in December came to 5.3 million. That put the so-called hires rate—the number of hires employers made as a share of overall employment—at 3.3%. That is a very low number, not only below the level of a few years earlier, when businesses were desperate to bring new workers on, but also well below its level before Covid hit.

Low hiring has historically correlated to a much higher unemployment rate than the U.S. is actually experiencing, about 4.4%. The disconnect between the two reflects an unusual environment where, despite the low pace of hiring, employers haven’t been shedding many workers, notwithstanding some big recent layoff announcements.

As a result, employment has been growing at a glacial pace, with the economy adding the fewest jobs last year, outside of a recession, since 2003. And economists expect annual revisions including in the January employment report, coming out Wednesday, will bring the 2025 jobs tally lower still.

The relatively low number of layoffs, said JPMorgan Chase economist Mike Feroli, is a reflection of an economy that continues to chug along, and hasn’t undergone the kind of shock to demand that leads employers to start shedding workers. The low level of quits, on the other hand, is probably driven by workers’ sense that the labor market is fragile.

Consumers surveyed by the New York Fed in December put their chances of finding new work in the next three months if they lost their job at 43%—the lowest level on record in the dozen years the bank has been asking the question. In the University of Michigan’s preliminary February survey of consumers, 60% of respondents said they expect the unemployment rate to rise over the next 12 months. A separate consumer survey, from the Conference Board, has seen a sharp rise in the share of people who say that jobs are hard to find and a drop in those who say jobs are plentiful.

“People are sticking around in their jobs, and because of that you don’t need to do as much replacement hiring,” said Feroli.

It is a situation that creates a sort of adverse feedback loop: People don’t want to quit the jobs they have because the pace of hiring is low, but part of why the pace of hiring is low is that nobody is quitting their jobs.

Another factor behind the lower hiring numbers: There simply aren’t as many people to hire.

President Trump’s crackdown on immigration has severely restricted the flow of people into the U.S. Coupled with an aging country, that has created a situation where there are fewer new entrants into the workforce.

In recent research, economists Wendy Edelberg and Tara Watson of the Brookings Institution, and Stan Veuger of the American Enterprise Institute, estimate that potential monthly employment growth—the number of jobs the economy needs to add each month to keep the unemployment rate stable—fell to about 35,000 in the second half of 2025 from about 140,000 in 2024. For this year, their estimated range centers on the addition of just 15,000 jobs a month.

Not only have immigration restrictions reduced the number of workers employers can hire, it cuts into how many workers employers need to hire, according to Veuger. That is because immigrants aren’t just workers, they are consumers, too. “It’s both supply and demand,” he said.

Veuger thinks that the fact that the unemployment rate is still low, though it has drifted up over the past few years, while hiring has stayed muted, suggests that reduced immigration is playing a greater role in the slow pace of hiring than factors such as trade uncertainty. Or, for that matter, artificial intelligence.

Sorting through AI’s effect on the job market has been challenging. Some analysts have pointed to the stalling in tech employment starting in November 2022—right around when OpenAI launched ChatGPT—as a sign it is cutting into hiring. The problem: There was a wave of tech layoff announcements in November 2022, as companies realized that the surge in business they experienced after the pandemic hit wasn’t going to persist. AI wasn’t in the mix.

Still, there is some evidence that AI is having an effect. In a recent analysis, Stanford University economists Erik Brynjolfsson, Bharat Chandar and Ruyu Chen found that young people’s employment prospects in jobs that are highly exposed to AI, such as software development, have been hurt. But in the context of U.S. employment of about 160 million, “it’s not enough to really move the market in aggregate yet,” said Brynjolfsson on the WSJ’s Take On the Week podcast.

The promise of work AI might perform, as opposed to any work it is already doing, could also be affecting hiring plans. Companies might be hesitant to bring new workers into roles that might turn out to not be necessary. The increase in the unemployment rate for recent college graduates could be a reflection of that, said JPMorgan Chase’s Feroli.

“I think it’s reasonable to think that that is driven by AI,” he said.