The labor market has reverted to a ho-hum state ahead of the Labor Department’s monthly jobs report on Friday. Despite spring signs of hiring momentum, employers have proceeded more deliberately in recent months. Job openings and hiring rates have stagnated even as layoffs remain exceedingly low.

Blerina Uruci, chief U.S. economist at T. Rowe Price, describes the situation as an "uneasy equilibrium of low hiring and low firing" that has persisted for some time. The steady, glacial pace of hiring is attributed to diminished worker demand and a dwindling supply. Many businesses hired zealously post-pandemic, leaving bloated payrolls, while heightened economic uncertainty—including the rise of artificial intelligence—has crimped hiring plans.

Simultaneously, an aging population and restrictive immigration policies have reduced the available worker pool. In recent weeks, hundreds of thousands of people from Haiti and other countries lost legal work ability after the Trump administration terminated their temporary protected status, which could factor into Friday’s payroll figures. The shrinking labor supply has kept unemployment low despite weakening hiring.

However, challenges persist beneath the surface. Diane Swonk, chief economist at KPMG, notes that although companies hold onto current employees, people on the sidelines, including recent college graduates, struggle to find work. Wages are failing to keep up with inflation lifted by higher gas prices caused by the war in Iran. These dynamics explain why many Americans remain downbeat about the economy despite aggregate statistics looking good.