Bundle up and prepare to settle in for the long haul—the American labor market has entered what many economists are calling the ‘Great Freeze.’ This phrase aptly captures the peculiar combination of sluggish job creation and minimal layoffs shaping today’s employment landscape. After more than a year of subdued activity, the environment remains marked by a series of ‘lows’: low hiring rates, gradual waves of layoffs, and a cooling pace of job openings. While the limited number of firings might appear to signal stability, the accompanying scarcity of new opportunities paints a far more complicated picture—a portrait of a workforce suspended in cautious equilibrium.
The roots of this phenomenon are deeply intertwined with corporate uncertainty and macroeconomic hesitancy. Economists speaking with Business Insider have explained that, although the broader economy continues to show signs of resilience—with growth and consumer spending still in decent shape—companies are acting defensively. Many firms, wary of unpredictable developments such as shifting tariff structures, supply chain vulnerabilities, and geopolitical tensions, are opting to retain the employees they already have rather than expand their teams. In other words, the lack of hiring and the lack of firing stem from the same cautious mindset: organizations are simultaneously reluctant to take the risk of shrinking too much or growing too fast.
For individuals navigating this environment—whether they are job seekers struggling to find openings, professionals considering whether to stay put, or hiring managers observing new constraints in talent acquisition—the situation feels paradoxical. On one hand, the ‘Great Freeze’ gives workers a sense of job security; on the other, it limits possibilities for professional advancement. From a corporate standpoint, the freeze provides cost efficiency and workforce consistency, yet it can also stifle innovation and internal mobility. The recruiting platform ZipRecruiter has labeled this phenomenon ‘The Great Freeze’ in its latest analysis of workforce turnover, suggesting that both employers and employees are effectively waiting for the fog of uncertainty to lift before making any major moves.
Nicole Bachaud, a labor economist at ZipRecruiter, describes this standoff succinctly: both sides of the labor market—companies and candidates alike—are in a holding pattern, hesitant to commit in an ambiguous economic climate. Daniel Zhao, the chief economist at Glassdoor, echoes this sentiment, emphasizing that with only a few months remaining in the year, there are no evident triggers that might quickly revitalize labor dynamics. The hiring-firing stalemate, therefore, may persist well into the foreseeable future.
Experts such as Jason Draho of UBS Global Wealth Management attribute the restraint in layoffs to solid fundamentals. Corporate earnings remain positive, and overall business performance remains sustainable enough that large-scale reductions in headcount would be difficult to rationalize. Stephen Juneau, senior U.S. economist at Bank of America, further elaborates that while companies continue to make profits, they see no compelling reason to overhaul their staffing structures. Yet he also points to looming factors—artificial intelligence reshaping workflow demands, uneven sectoral performance in industries like construction, and ongoing global supply challenges—that have made businesses more conservative about ramping up hiring.
Adding complexity to the situation is a notable slowdown in labor force growth. With fewer new workers entering the market, the reduced labor supply itself acts as a drag on hiring momentum. Juneau identifies this as a negative supply shock, one that moderates recruitment activity even further. Consequently, although unemployment has ticked up ever so slightly, as Draho notes, it remains historically low, revealing just how tight and peculiar this labor market remains.
This tendency toward ‘labor hoarding’—the deliberate retention of employees even when business demand wanes—has emerged as a defensive strategy among employers still haunted by the staffing shortages of recent years. After the upheavals of the so-called Great Resignation and the acute scarcity of talent that followed, many organizations prefer to safeguard their existing workforces rather than risk losing institutional knowledge or scrambling to rehire once economic conditions improve. Draho argues that as long as businesses believe that growth, fiscal stimulus, or greater clarity on tariffs might return in the next year, they have a strong incentive to keep workers now rather than face costly rehiring cycles later.
Still, surveys suggest shifting expectations: according to ZipRecruiter’s September report, 63% of companies plan to expand their hiring in the coming year—a noticeable decline from 76% the year before. Bachaud warns that persistent macroeconomic headwinds—ranging from inflationary pressures to delayed business investments—are likely to maintain this subdued pace for at least the near term. Zhao, however, reminds us that labor hoarding has limits. If an economic downturn deepens substantially, even well-positioned firms cannot indefinitely retain excess staff. ‘While businesses with reserve resources can absorb temporary unprofitability, no company can fully withstand the pressures of a prolonged recession without recalibrating its labor costs,’ he cautions.
For employees and job seekers, this frozen state of the market brings both reassurance and frustration. Workers who are currently employed benefit from heightened job security; however, those searching for new opportunities face narrowing options. In August, 7.4 million Americans were unemployed, yet only 7.2 million jobs were available—a near 1:1 ratio that underscores how much the labor market has cooled since its post-pandemic recovery, when openings significantly outnumbered unemployed workers. Many now must compromise, accepting positions outside their fields of expertise or below their desired pay grade—a reflection of how diminished fluidity curtails both economic mobility and professional satisfaction.
Zhao notes that this lack of dynamism extends beyond hiring into internal career progression itself. Employees seeking advancement—through promotions, lateral moves, or salary negotiations—face tougher constraints when their employers are intent on simply maintaining stability. Data from the Federal Reserve Bank of Atlanta confirms this stagnation, showing that the median wage growth for job switchers and job stayers now looks remarkably similar, suggesting that even changing employers no longer guarantees a meaningful pay bump.
Bachaud cautions that companies’ preoccupation with stability comes at a long-term cost: innovation and growth may falter without movement and risk-taking. In contrast, she encourages workers to take advantage of this period by upskilling—developing new competencies and strengthening their professional portfolios despite the scarcity of external opportunities. Refining expertise, gaining certifications, or pursuing in-role learning can help maintain momentum, ensuring that when the freeze eventually thaws, individuals will be well-positioned to seize emerging opportunities.
As this unique labor moment unfolds, one overarching truth emerges: the Great Freeze is not a collapse, but a pause—a complex stasis keeping both workers and employers in a delicate balance between prudence and possibility. For anyone experiencing these changes firsthand, from seasoned professionals to hiring managers witnessing transformed workplace dynamics, the story continues to evolve. If you find yourself navigating this uncertain environment, Business Insider invites you to share your experiences and insights at mhoff@businessinsider.com.
Sourse: https://www.businessinsider.com/low-hire-low-fire-layoffs-employees-stuck-unemployment-job-seekers-2025-10
