job market slowdown: Workers hold on to jobs as layoffs rise and quit rate falls to decade low
A new consumer survey from the New York Federal Reserve showed that the expected quit rate fell to 15.9% in February. This means fewer workers think they will leave their jobs voluntarily in the next year.The quit rate dropped by almost 3 percentage points in February. This shows a clear fall in workers’ willingness to change jobs.
Worker confidence falling
Economists say this is the lowest expected quit rate in over a decade, which shows workers are becoming less confident about job opportunities. Economist Cory Stahle from Indeed Hiring Lab explained that many workers normally change jobs every three to five years during their careers. Stahle said that when workers are ready for a new job but cannot find good opportunities, they begin to feel stuck in their current jobs.
The drop in confidence also comes after employers cut 92,000 jobs in February, which raised concerns about weakness in the labor market, as per the report by Investopedia labor market data. The year 2025 saw the slowest job creation outside of a recession in more than 20 years, showing that the job market has been cooling for some time.Economists say a low quit rate means workers are not confident they can find better jobs elsewhere. This usually slows down wage growth.
Low hire low fire trend
When workers stay in their jobs and companies hire less, the labor market slows down. This can also lead to slower economic growth overall. Last year’s labor market was described as “low-hire, low-fire,” meaning companies were hiring less but also not firing many workers. During the Great Resignation in 2022, about 3% of workers left their jobs voluntarily. Now that number has dropped to around 2%, according to government data, as cited by Bureau of Labor Statistics job openings report cited by Investopedia.
The same report showed that employers had a 3.3% hiring rate, which is close to the lowest levels seen in more than a decade. Economist Anthony Chan, former economist at JPMorgan Chase, said the drop in hiring may not only be due to employers slowing down but also because workers are being more careful about changing jobs. Chan also said immigration enforcement could be affecting the labor market. With fewer migrant workers, the total labor supply becomes smaller.
When the labor supply changes, companies may adjust their hiring plans, which can influence the number of jobs available. Job openings in the labor market have fallen compared with the high levels seen in 2022, when the economy was recovering strongly after the pandemic. Because there are fewer openings and less hiring, workers believe there are fewer attractive job opportunities available today. Chan explained that during the post-pandemic expansion, workers had many choices and job offers, but those opportunities are now much more limited.
FAQs
Q1. Why are workers not quitting their jobs now?
Workers are staying in their jobs because the job market is slowing down and they are less confident about finding better opportunities, according to the New York Federal Reserve survey reported by Investopedia.
Q2. What does a low quit rate mean for the economy?
A low quit rate shows workers are cautious about changing jobs, which can slow wage growth and signal a weaker labor market.
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