The Low-Hire, Low-Fire Labor Market Is Calm but Fragile

Molly Hirner and Yusuf Mercan

Economic Bulletin, 2026, 4

Abstract: The unemployment rate has held steady at just above 4 percent in 2026. However, this low unemployment rate does not mean workers are finding jobs easily. Instead, unemployment is low because job loss is near historical lows. This low-hire, low-fire labor market may be a source of vulnerability. Although the current unemployment rate is identical to the unemployment rate in 1999, the labor market is less resilient. We show that a mild downturn akin to the 2001 recession would drive unemployment to 8 percent today compared with only 6 percent in 1999.

Date: 2026
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