The US job market has alternated between gains and losses for nearly a year straight, and demographic shifts mean this volatility is becoming the new normal.
Every month, investors, founders, and policymakers hold their breath for the latest employment figures. Over the past year, those breath-holders have been rewarded with a statistical roller coaster: job gains one month, losses the next, repeat. The US added 178,000 jobs in March, right after a revised loss of 133,000 in February. This alternating pattern has held since last May, and the underlying forces driving it are not going away anytime soon.
Strip away the month-to-month noise and a clearer picture emerges. Between last April and this March, the US economy added a grand total of just 152,000 jobs. That averages out to roughly 14,000 per month, a sharp drop from the 77,000 monthly average during the same period a year earlier. The labor market is not collapsing, but it has essentially flatlined, and the reasons tell us something important about the next decade of economic growth.
For years, economists operated under a shared assumption: the US needed to add somewhere around 100,000 to 170,000 jobs per month just to keep the unemployment rate stable. That number, often called the breakeven rate, was driven by steady population and labor force growth. It is now plummeting.
Gregory Daco, chief economist at EY, has pointed out that an aging workforce and a sharp decline in net immigration have dragged the breakeven rate down significantly. Economist Jed Kolko has estimated the economy now needs fewer than 50,000 new jobs a month to hold unemployment steady, compared with roughly 170,000 two years ago. Researchers at the Federal Reserve Board, Seth Murray and Ivan Vidangos, have gone further, suggesting the breakeven could hit near zero this year, a scenario they describe as unprecedented in recent American history.
For startup leaders and hiring managers, this shift carries real weight. A lower breakeven rate means the economy can appear healthy even with minimal job creation. It also means a single month of job losses does not necessarily signal a recession. But the trade-off is that monthly numbers become far more volatile. As Murray and Vidangos noted in recent research, employment growth in any given month is now almost as likely to be negative as positive, and those negative prints could be large.
Immigration and Demographics Are Driving the Shift
Census Bureau data tells the story behind the story. Net international migration to the US plunged last year, removing a critical source of labor force expansion. At the same time, baby boomers continue to retire in large numbers, and labor force participation dropped to 61.9 percent in March, a level not seen since 2021.
Laura Ullrich, director of economic research in North America at the Indeed Hiring Lab, has suggested that this lackluster job growth could actually be the right spot for where the country currently stands. With fewer new entrants into the labor pool, the economy simply does not need to generate jobs at the pace it once did. The challenge is that policymakers, markets, and the public are still calibrated to interpret monthly job reports through an outdated lens.
This has practical consequences for how businesses plan. Talent acquisition teams may find that low headline job growth coexists with a genuinely competitive hiring landscape in sectors like AI, cybersecurity, and advanced manufacturing. Founders building companies in those spaces should not assume the macro labor market story applies equally to their specific talent pool. Skilled workers in high-demand technical fields remain scarce, even as the overall jobs number barely moves.
Looking ahead, expect the whipsaw pattern to continue. Near-zero labor force growth practically guarantees that monthly prints will swing between positive and negative territory with regularity. The sooner investors and business leaders stop treating each swing as a breaking crisis, the better positioned they will be to focus on the structural trend underneath: a labor market that is settling into a slower, tighter, and more volatile equilibrium.
