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When the labor market cools, employers generally post fewer openings and hire less briskly, workers move between jobs less often, and job seekers may find it harder to turn applications into offers. That does not automatically mean mass layoffs or sharply rising unemployment: labor-force growth can slow at the same time as hiring, keeping the unemployment rate from moving much. The clearest picture comes from looking at vacancies, hires, quits, layoffs, job starts and labor-force growth together.
What “cooling” means—and what it does not
A cooling labor market is a slowdown in the pace of hiring and job movement, not a single official condition with a fixed threshold. Employers may be less eager to add staff, openings may become less plentiful, and workers may be less able to switch jobs or negotiate from a strong position.
It does not necessarily mean employers are rapidly eliminating jobs. A market can cool through fewer new hires and fewer voluntary departures while layoffs remain comparatively limited. Nor does a declining number of vacancies guarantee that every remaining opening will be filled: the Bureau of Labor Statistics (BLS) counts a job as an opening only if work is available, it could start within 30 days, and the employer is actively recruiting.
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What the latest U.S. employer data show
The BLS’s August 2026 Job Openings and Labor Turnover Survey (JOLTS), published September 29, 2026, reported 7.1 million openings, 5.2 million hires, 5.1 million total separations, 3.1 million quits, and 1.6 million layoffs and discharges. The respective rates were 4.3%, 3.3%, 3.2%, 1.9%, and 1.0%. The release described most measures as little changed from the prior month; these figures do not describe a one-month collapse. The latest monthly estimates are preliminary and may be revised. See the BLS August 2026 JOLTS release.
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For a longer view, the BLS’s January 2026 release put the 2025 annual average at 7.1 million openings, 571,000 fewer than in 2024. The average openings rate declined from 4.6% in 2024 to 4.3% in 2025. Annual hires fell by 1.5 million to 63.0 million; quits fell by 1.3 million to 38.0 million; and layoffs and discharges rose by 1.2 million to 21.2 million. These are annual figures reported in the January release, not replacements for the latest monthly estimates. The BLS release explains that openings measure unmet labor demand, while hires and separations count payroll changes during the month. Its JOLTS definitions also explain that monthly estimates can be revised as survey reports arrive and that annual updates may revise earlier years.
Why openings, hires and layoffs answer different questions
- Openings count positions meeting the BLS criteria on the last business day of the month. They indicate employers’ unmet demand, not guaranteed jobs for applicants.
- Hires count people added to payrolls during the month. Fewer hires can make job searches harder even if layoffs do not surge.
- Quits measure voluntary departures. The BLS says the quits rate can serve as a measure of workers’ willingness or ability to leave jobs.
- Layoffs and discharges capture involuntary separations, a distinct signal from reduced hiring or reduced quitting.
JOLTS hires minus separations need not match the change in the BLS’s Current Employment Statistics payroll series in a particular month; the series use different methods and reference periods.
Why job searches can feel harder
Employer vacancy data are only one side of the story. In the Federal Reserve’s 2025 household survey, 13% of adults said they started a new job in 2025, down from 15% in 2022. The share who applied for new jobs did not change. The Federal Reserve interprets stable applications alongside fewer job starts as evidence that moving into a new job became harder. This is a household survey response, not a count of employer-reported hires. See the Federal Reserve’s 2025 household survey.
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Scan for outdated or missing drivers - takes under a minuteDriver Scan →Repair Windows errors before they cause bigger problemsFix Now →Voluntary job movement eased in the same survey: 8% of adults said they left a job voluntarily in 2025, compared with 9% in 2024. Seven percent said they had been laid off, up from 6% in 2024. Among adults under 30, 15% were not working and said they could not find work, compared with 13% in 2024 and 11% in 2023. Those age-specific responses show why a national average may not capture what younger job seekers experience.
The survey also found that among adults who changed jobs, 60% said the new job was better in 2025. That was down from 72% in 2022 and similar to 2024. It reflects respondents’ assessments of their new jobs; it is not an earnings measure.
What cooling can mean for raises and bargaining
In the Federal Reserve survey, 50% of workers reported receiving a raise or promotion in 2025, three percentage points below the share in 2022. Seventeen percent said they had asked for one. The Federal Reserve suggests willingness to ask may reflect how workers perceive their bargaining power and employers’ flexibility.
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These figures describe workers’ survey responses about raises or promotions and requests. They are not the annual rate of wage growth across the U.S. economy, and they do not establish that every worker’s pay is falling. The available figures here do not establish a current aggregate wage-growth rate, so they cannot support a precise forecast of what wages will do next.
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1Repair Windows errors before they cause bigger problems2Scan for outdated or missing drivers - takes under a minute3Clear out junk files and repair common Windows errorsWhy unemployment can stay relatively steady as hiring slows
Unemployment depends not only on how many jobs are being added, but also on how many people are entering or remaining in the labor force and looking for work. If labor-force growth slows alongside job growth, a weaker pace of hiring may produce only a modest change in unemployment. A steady unemployment rate therefore does not prove that job-finding conditions are unchanged.
A January 12, 2026 analysis by Federal Reserve Bank of San Francisco researchers examined the slowdown from 2023 through mid-2025. In their adjusted series, average job growth fell by about another 80,000 per month between the first halves of 2024 and 2025, while average unemployment rose from 3.9% to 4.1%. The authors attributed the relatively small unemployment change in part to a similarly paced slowdown in labor-force growth. These are the researchers’ adjusted estimates and analysis, not a direct, unrevised BLS headline series. Read the San Francisco Fed analysis.
The authors also found that much of the job growth in the first half of 2025 was concentrated in education and health services, while other broad sectors were flat or contracting. They identified declining labor-force participation as a contributor to slower labor-supply growth and cautioned that the apparently even stepdown may conceal fragility.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Should you quit your job while hiring is cooling?
The national indicators cannot tell an individual worker whether to resign. They do suggest that job-to-job movement has become less common than in the stronger conditions reflected in some earlier survey comparisons, and the Federal Reserve’s application and job-start findings indicate that a search may take more effort to convert into a new role.
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- Before resigning without another offer: consider how long you could cover essential expenses if the search takes longer than expected.
- If you can search while employed: compare actual roles, compensation, benefits, location and start dates rather than assuming a posted vacancy will lead to an offer.
- If you are negotiating a raise: treat survey-level reports as context, not a prediction of your employer’s decision; your role, performance and organization matter.
- If conditions differ in your field or age group: national averages may not describe your prospects, as the survey’s findings for adults under 30 illustrate.
How to read labor-market updates without overreading them
Use multiple indicators and keep their definitions and reference periods attached to the numbers. A monthly JOLTS estimate is an employer survey that can be revised; a Federal Reserve household-survey percentage is a report from adults about their experiences. They complement each other but are not interchangeable.
Quick Recap
- Compare openings and hires with layoffs to distinguish weaker recruitment from widespread job cuts.
- Compare quits and job starts with applications to see whether workers are moving less often or searches are converting less readily.
- Keep workers’ reports of raises and promotions separate from economy-wide wage-growth measures.
- Read job growth alongside labor-force growth when interpreting unemployment.
- Check the publication and reference dates before treating a figure as current; monthly releases are revised, and annual averages answer a different question from a single month.
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