## US Job Market Dries Up: Is Weak Employment the Beginning of Bigger Problems?

In November, the United States faced a harsh reality – **demand for labor** reached a turning point, and employers began noticeably slowing down recruitment. Data from the Department of Labor show that the number of job openings decreased to 7.146 million, the lowest figure since September 2024. This is significantly below economists' forecasts, who expected around 7.60 million unfilled positions.

Most interestingly, the deterioration is not due to mass layoffs – the number of people losing their jobs decreased by 163,000, and the voluntary resignation rate remains at historically low levels. Economists describe this situation as “no hiring, no firing” – employers are hesitant to expand but also fear new layoffs.

### Where is the **demand for labor** disappearing?

Looking at the sectors that lost job openings, a clear trend emerges. The hospitality and food service sector saw a decline of 148,000 vacancies, while healthcare and social assistance lost 66,000 positions. At the same time, retail trade registered an increase of 121,000, likely due to preparations for the holiday season, and construction added 90,000 available positions.

Small companies managed to increase their job postings, but medium-sized entities (50-999 employees) are facing the biggest challenges. This suggests that uncertainty affects entrepreneurs more strongly than corporations.

### Political uncertainty and artificial intelligence paralyze growth

Marc Giannoni from Barclays pointed out a “clear decline in job openings and no signs of improvement in market conditions.” Economists cite two main reasons. First, uncertainty related to potential import tariffs – the Supreme Court was expected to issue a ruling on Friday regarding President Donald Trump’s global tariffs, which is paralyzing corporate investment decisions.

Second, the integration of artificial intelligence into various professional roles reduces the demand for workers. Employers are testing new technologies instead of expanding their staff – this is a typical scenario of structural transition, not just cyclical weakness.

### Indicators of an emerging problem

The ratio of job openings to unemployed persons is particularly concerning – it fell to 0.91 in November, the lowest since March 2021. This means there are now fewer than one available position per unemployed person. The overall vacancy rate decreased to 4.3% from 4.5% in October.

Sarah House from Wells Fargo warns: “Although layoffs remain moderate, the low voluntary resignation rate increases the risk that employers will be forced to reduce employment instead of relying on natural turnover.”

### What’s next? The Federal Reserve remains on hold

These data reinforce expectations that the Federal Reserve will keep interest rates unchanged this month. The minutes from the December 9-10 meeting revealed deep divisions within the Fed, suggesting a cautious approach to further rate cuts.

At the same time, the labor market is not entirely frozen. The Purchasing Managers’ Index (PMI) for the services sector rose to 54.4 in December from 52.6 in November, and the employment index in services rebounded to 52.0 after six months of declines. This indicates that the economy may resume solid growth at the beginning of the year, supported by tax cuts and decreasing trade uncertainty.

### Outlook for 2026

Ben Ayers from Nationwide forecasts that “steady and consistent economic growth in 2026 should keep the services sector in a solid expansion, with growth potential if the effects of fiscal stimuli are significant."

The key question: is the weakness of **demand for labor** the start of bigger problems, or a temporary pause before growth resumes? The upcoming employment reports will be crucial in assessing the health of the economy.