Job Market Protects Existing Positions By Creating Almost No New Ones

WASHINGTON—The American job market has achieved stability by encouraging companies not to dismiss the people they employ and not to employ many additional people.

New applications for unemployment benefits fell to 203,000 last week from a revised 207,000, remaining near historically low levels. The unemployment rate was also 4.1 percent in July. Workers who already have jobs can therefore enjoy substantial security, particularly if they avoid needing a different one.

Payroll employment declined by 23,000 in July. Employers have added an average of about 61,000 jobs a month this year, according to the Associated Press, and forecasters expect the August report to show another 65,000. Those figures leave the economy with few layoffs and little of the hiring that normally helps new graduates, displaced workers, and people seeking better positions.

Businesses remain reluctant to fire employees after the worker shortages that followed the pandemic. They are also reluctant to hire amid high interest rates, trade uncertainty, and elevated fuel costs. Economists have described the result as a “no hire, no fire” market, providing a concise national employment policy without requiring either activity.

The arrangement is reassuring from inside a payroll system and less so from outside one. American employers have reduced labor-market turbulence by asking nearly everyone to remain exactly where they are.