‘No hire’ job market leaves unemployed in limbo as threats to economy multiply

America’s “Jobless Boom”: The Paradox of Low Unemployment and Slow Hiring

When Carly Kaprive relocated from Kansas City to Chicago last year, she anticipated a brief job search of three to six months. After all, the 32-year-old project manager had never experienced unemployment exceeding three months. Yet after submitting 700 applications, she remains without work, caught in a frustratingly extended hunt that’s markedly more challenging than her last job search just two years ago.

“I have definitely had mid-interview roles be eliminated entirely, that they are not going to move forward with even hiring anybody,” Kaprive said, describing how companies have abruptly canceled positions amid economic uncertainty.

Kaprive’s experience exemplifies what economists are calling a historical anomaly in the U.S. labor market. Despite a relatively low unemployment rate of 4.3% and continued economic growth, those seeking work face the slowest pace of hiring in more than a decade. Diane Swonk, chief economist at KPMG, aptly describes this phenomenon as a “jobless boom.”

The current labor market presents a peculiar dichotomy. While headline-grabbing corporate layoffs draw attention, it’s the widespread reluctance of companies to add workers that has created a more painful job market than the unemployment rate suggests. The result is a bifurcated labor market: those with jobs enjoy relative security due to fewer layoffs, while the unemployed struggle to find work.

“It’s like an insider-outsider thing,” explains Guy Berger, head of research at the Burning Glass Institute. “Outsiders that need jobs are struggling to get their foot in, even as insiders are insulated by what up until now is a low-layoff environment.”

Recent announcements of job cuts by major corporations like UPS, Target, and IBM have raised concerns, though economists caution it’s too early to determine whether these signal broader economic deterioration. However, any increase in layoffs would be particularly challenging in an environment where hiring is already sluggish.

Compounding the difficulty in assessing the labor market is the ongoing government shutdown, which has halted the U.S. Department of Labor’s monthly employment reports. The October jobs report, normally released on the first Friday of the month, has been delayed like September’s figures before it. When eventually published, the October report may be less comprehensive due to data collection challenges.

Before the shutdown, Labor Department data showed the hiring rate—the percentage of employed people hired in a given month—fell to 3.2% in August, matching the lowest figure outside the pandemic since March 2013. The stark difference? In 2013, the unemployment rate was 7.5% as the economy recovered from the Great Recession—significantly higher than August’s 4.3%.

Many jobseekers remain skeptical of the current low unemployment rate. Brad Mislow, a 54-year-old former advertising executive from New York City, has been mostly unemployed for three years and now substitute teaches to make ends meet.

“It is frustrating to hear that the unemployment rate is low, the economy is great,” Mislow said. “I think there are people in this economy who are basically fighting every day and holding on to pieces of flotsam in the shark-filled waters or, they have no idea what it’s like.”

With government data unavailable, financial markets are increasingly relying on private-sector information, which presents a mixed picture. Challenger, Gray & Christmas reported job cut announcements surged 175% in October compared to a year ago, alarming investors. Conversely, ADP reported businesses added 42,000 jobs in October after two months of declines, though the gain was modest. Meanwhile, Revelio Labs estimated the economy actually lost 9,000 jobs last month, while the Federal Reserve Bank of Chicago projects unemployment ticked up to 4.4%.

Economists point to several factors contributing to the hiring slowdown, including uncertainty around tariffs, potential impacts of artificial intelligence, and now the government shutdown. While investment in AI-powering data centers is booming, high interest rates have weakened other sectors like manufacturing and housing.

“The concentration of economic gains (in AI) has left the economy looking better on paper than it feels to most Americans,” noted Swonk.

Recent college graduates have particularly suffered from the hiring slowdown, though workers of all ages face challenges. Suzanne Elder, a 65-year-old operations executive with extensive healthcare experience, found herself unemployed after a layoff in April. Two years ago, she received three job offers within three months. Now she’s been searching for work since spring.

Elder’s experience reflects a troubling trend: unemployment spells are lengthening. More than one-quarter of those out of work have been unemployed for six months or longer, up from 21% a year ago. Swonk pointed out that such increases typically occur only during recessions.

Furthermore, research from the Federal Reserve Bank of Minneapolis indicates more unemployed individuals are abandoning their job searches altogether, which artificially lowers the unemployment rate since those who stop looking aren’t counted as unemployed.

Despite these challenges, Kaprive remains determined. She’s taken courses on Amazon’s web services platform to enhance her technology skills and remains flexible in her search.

“We can’t be narrow-minded in what we’re willing to take,” she said, embodying the resilience many job seekers need in today’s paradoxical labor market.