US Labor Market Settles Into Full Employment as Immigration Slows

JOLTS report shows hiring and quits declining, but still at healthy levels as labor supply growth moderates

Mar. 31, 2026 at 10:20pm

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The latest JOLTS (Job Openings and Labor Turnover Survey) report from the Bureau of Labor Statistics indicates that the US labor market is transitioning to a state of full employment, as the rapid influx of migrant workers that fueled a hiring frenzy in recent years has slowed due to tighter immigration enforcement. While hiring and quits have declined from pandemic-era peaks, they remain at historically healthy levels, suggesting the economy no longer needs the same pace of job growth to maintain low unemployment.

Why it matters

Understanding the shift in the labor market dynamics is crucial, as policymakers and economists have traditionally viewed hiring and job churn declines as signs of weakness, when in reality they may simply reflect a labor supply that is no longer expanding at breakneck pace. This transition has implications for inflation, wage growth, and the overall health of the economy as it moves away from the anomalous conditions of the post-pandemic period.

The details

The JOLTS report showed job openings fell to 6.88 million in February from 7.24 million in January, while hires dropped to 4.85 million, the lowest since April 2020, and quits slipped to 2.97 million, the lowest since August 2020. However, the Kansas City Fed estimates the number of jobs needed each month to keep the unemployment rate steady has fallen from around 150,000 to roughly 50,000, as the labor force growth has slowed. This suggests the economy is no longer in need of the same rapid pace of hiring to maintain full employment.

  • The JOLTS report was released on March 31, 2026.
  • The labor market trends described in the report cover the period from 2022 through the first half of 2023.

The players

Jerome Powell

The Chair of the Federal Reserve, who acknowledged the shift in the labor market dynamics and the potential 'downside risk' of the new equilibrium.

Brookings Institution

A think tank that has suggested the number of jobs needed each month to keep the unemployment rate steady could turn negative this year.

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What they’re saying

“Near-zero private-sector job growth may now be roughly what the economy requires. That does have a feel of downside risk and is not kind of a really comfortable balance.”

— Jerome Powell, Chair, Federal Reserve

The takeaway

The transition to a labor market characterized by full employment and slower labor force growth represents a fundamental shift from the conditions of the recent past. Policymakers and economists will need to recalibrate their understanding of labor market health, moving away from an overreliance on rapid hiring and job churn as the primary indicators of strength.