When the labor market cools, employers generally add workers and fill openings more slowly, while workers have fewer opportunities to switch jobs or negotiate. That can make a job search harder without triggering mass layoffs or a sharp rise in unemployment. To tell what is changing, look at vacancies, hires, quits, layoffs, job starts and labor-force growth together—not the unemployment rate alone.
What a cooling labor market means
A cooling labor market is a slowdown in the pace of hiring and worker movement. It is not a precise threshold, and it does not automatically mean the economy is in a recession or that employers are laying off workers en masse. Employers may still be hiring, but they can have fewer openings, take longer to fill them, or hire fewer people than before.
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Different indicators capture different parts of that picture. The U.S. Bureau of Labor Statistics’ Job Openings and Labor Turnover Survey (JOLTS) tracks employer-reported openings, hires and separations. Household surveys capture people’s reports of job starts, applications and raises. Those measures complement one another; they are not interchangeable.
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The latest JOLTS figures available here are for August 2026, published September 29, 2026. The BLS reported 7.1 million openings, 5.2 million hires and 5.1 million total separations. The release described most measures as little changed from the previous month, so these figures are not evidence of a one-month collapse. The estimates are preliminary and may be revised.
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| August 2026 JOLTS measure | Level | Rate |
|---|---|---|
| Job openings | 7.1 million | 4.3% |
| Hires | 5.2 million | 3.3% |
| Total separations | 5.1 million | 3.2% |
| Quits | 3.1 million | 1.9% |
| Layoffs and discharges | 1.6 million | 1.0% |
These are BLS estimates for one month, not a forecast. An opening is a position available to start within 30 days that the employer is actively recruiting to fill, and it must be open on the last business day of the month. It is not a guaranteed hire. Hires and separations count payroll changes during the month. The BLS explains that openings complement unemployment data because vacancies show unmet demand for workers. See the BLS August 2026 JOLTS release and its JOLTS definitions.
Annual figures provide a different perspective. In a January 2026 release reporting 2025 data, the BLS said the annual average of openings was 7.1 million, 571,000 below 2024, and the average openings rate declined from 4.6% to 4.3%. 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 annual averages describe 2025 and should not be confused with the August 2026 monthly estimates. JOLTS figures can be revised when new survey reports arrive, and annual updates can revise earlier estimates.
Why it can feel harder to find a job
Fewer hires mean fewer openings turn into new jobs, even if applications continue. The Federal Reserve’s 2025 household survey found that 13% of adults started a new job in 2025, down from 15% in 2022, while the share applying for new jobs did not change. The Fed interprets that combination as evidence that moving into a new job became harder.
Worker movement also eased. In the same survey, 8% of adults said they voluntarily left a job in 2025, down from 9% in 2024; 7% reported being laid off, up from 6% in 2024. Among adults under 30, 15% said they were not working and could not find work, compared with 13% in 2024 and 11% in 2023. These are self-reported household-survey responses, not employer payroll counts. The findings are in the Federal Reserve’s 2025 Report on the Economic Well-Being of U.S. Households.
In JOLTS, the quits rate is one signal of workers’ willingness or ability to leave jobs. When quits and job starts decline, workers may have less confidence that another position will be available or better. A lower quit rate does not by itself establish why people stayed, and a vacancy count does not show how many applicants competed for each job.
Will a cooling market mean smaller raises?
It can reduce workers’ bargaining leverage, but the available figures do not establish a current economy-wide wage-growth rate or show that everyone’s pay is falling. In the Federal Reserve’s 2025 household survey, 50% of workers said they received a raise or promotion, three percentage points below 2022; 17% said they had asked for one. Those are reports of raises, promotions and requests—not the annual growth rate of wages across the economy. The Fed notes that willingness to ask may reflect how workers perceive their bargaining power and employers’ flexibility.
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Among adults who changed jobs, 60% said their new job was better in 2025, down from 72% in 2022 and similar to 2024. That response describes workers’ assessment of their new job; it is not a direct measure of pay or earnings.
Why unemployment can rise only modestly as hiring slows
The unemployment rate depends not only on labor demand but also on how many people are in the labor force and looking for work. If labor-force growth slows alongside job growth, unemployment may move only modestly even as employers hire less briskly and job searches get tougher.
A January 12, 2026, analysis by Federal Reserve Bank of San Francisco researchers examined the slowdown from 2023 through mid-2025. Their adjusted series showed average job growth falling by about 80,000 per month between the first halves of 2024 and 2025, while average unemployment rose from 3.9% to 4.1%. The researchers attributed the relatively small unemployment change in part to a similarly paced slowdown in labor-force growth. These figures are the researchers’ adjusted analysis, not an unrevised BLS headline series. See the San Francisco Fed Economic Letter.
The same analysis 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. The authors also pointed to declining labor-force participation as a contributor to slower labor supply. A steady unemployment rate therefore does not prove that job-finding conditions are unchanged.
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These national indicators cannot tell you whether quitting is right for your particular job, finances or prospects. A cooling market does suggest taking care with the timing: fewer job starts and lower voluntary movement point to less momentum for job-to-job transitions, but they do not predict your outcome. Consider the decision against your own circumstances rather than treating a national trend as a guarantee.
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- Check your financial runway and obligations before leaving income without another role secured.
- If you are looking to move, compare actual offers and working conditions rather than assuming a new job will be better; workers’ assessments of new jobs have softened since 2022.
- Distinguish an advertised opening from an active offer. JOLTS openings meet a specific BLS definition, but they are not a promise that a particular applicant will be hired.
How to read labor-market headlines
- Compare openings and hires with layoffs, rather than treating a decline in vacancies as proof of mass job loss.
- Look at quits and job starts alongside applications to understand whether people are moving into jobs, not just seeking them.
- Keep survey-reported raises and promotions separate from measured aggregate wage growth.
- Consider labor-force growth as well as job growth when interpreting unemployment.
- Check the reference month, release date and revision status. Monthly indicators are estimates, and employer-side JOLTS counts do not always align with payroll employment changes because their methods and reference periods differ.
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