U.S. labor market swings as slower population growth resets hiring trend

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U.S. labor market hiring trend

Highlights

U.S. payrolls added only 152,000 jobs from April 2023 to March 2024, averaging 14,000 per month versus 77,000 prior year, amid slowing labor force growth.
Net international migration drops from 2.7 million in 2024 to a projected 321,000 this year, lowering the breakeven hiring rate below 50,000 jobs per month.
Economists warn volatile payroll reports and structurally lower hiring needs will shift labor market assessments toward wage growth and purchasing power over headline job creation.

Payroll volatility reflects lower labor force growth

Between last April and this March, the U.S. economy adds only 152,000 jobs in total, an average of about 14,000 a month. That compares with an average of 77,000 a month over the same period a year earlier. The pattern suggests the labor market is no longer producing steady monthly gains and is instead moving around a much flatter underlying trend.Economists cited in the article link that slowdown to weaker labor force growth. Laura Ullrich, director of economic research in North America at the Indeed Hiring Lab, says softer hiring may represent an appropriate level for an economy facing cooler immigration and an aging population. Seth Murray and Ivan Vidangos of the Board of Governors of the Federal Reserve System write that the U.S. could see near-zero labor force growth as soon as this year, a development they describe as unprecedented in recent history.Labor force participation falls to 61.9% in March, a level last seen in 2021. In that environment, monthly payroll results are more likely to alternate between positive and negative readings. The article says a lower hiring threshold to keep unemployment stable means weak or even negative monthly job prints may become more common.

Immigration slowdown changes breakeven hiring rate

The Census Bureau data cited in the article show net international migration rebounds after pandemic-era restrictions and peaks at 2.7 million in 2024. It then drops to 1.3 million in 2025 and is expected to fall to about 321,000 this year. The bureau attributes that sharp cooldown to both lower immigration and higher emigration.Gregory Daco, chief economist at EY, says lower net migration and an aging population push down the so-called breakeven rate of job creation needed to hold unemployment steady. The article cites economist Jed Kolko as estimating the economy now needs fewer than 50,000 jobs a month, down from roughly 170,000 two years earlier. Murray and Vidangos add that if labor force growth is essentially zero, the breakeven rate could also move close to zero.That lower threshold changes how investors, employers and policymakers interpret payroll reports. A softer hiring number no longer automatically points to labor market deterioration if labor supply is also growing more slowly. At the same time, the article notes that volatility complicates efforts to judge whether the economy remains healthy beneath the headline swings.

Economists see broader shift in labor market metrics

Nicole Bachaud, an economist at ZipRecruiter, says a stable unemployment rate alone may not be enough to define a healthy economy as population dynamics change. She points to wage growth relative to living costs as another important benchmark. That suggests labor market assessment may increasingly depend on income and purchasing power rather than payroll growth alone.Bachaud also says the labor market one to five years from now is likely to look quite different, with artificial intelligence adding another layer of change for employers and workers. If immigration remains subdued and retirements continue, the U.S. jobs market may operate with structurally lower monthly hiring needs. That would leave businesses and policymakers adapting to a labor market where volatility in headline job creation becomes a regular feature rather than an exception.

We previously reported on the stronger-than-expected March U.S. jobs report, when payrolls rose by 178,000 versus forecasts near 60,000 and unemployment edged down to 4.3%. That article also highlighted February’s sharp downward revision and the mixed details beneath the headline, along with the market and Fed-policy implications of firmer labor data.

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