While the tide is coming in or going out, the water is very still for a short time. This is called the “still moment.” This is known as “slack water” by sailors. It’s just a break, not a place to go. And that phrase might be the most accurate two words anyone has used in years to describe the American job market right now.
The jobs report for June hit hard. Total nonfarm payroll grew by only 57,000 jobs, which was a lot less than what most private-sector economists thought would happen. Even though the unemployment rate went down a little to 4.2%, this is not a good sign. The rate of people looking for work went down, which means fewer people were even looking. The numbers for April and May were lowered by a total of 74,000 jobs. If you look at the picture with your eyes closed, it doesn’t show growth. It looks like drift.
The strange thing about this time is that it doesn’t fit into any normal economic story. It’s not a recession because companies aren’t rushing to lay off workers and layoffs are still at an all-time low. It’s not recovery either. There has been a noticeable lack of hiring, almost like people are being careful. Companies keep their current employees and job openings close at hand. If you go to most mid-sized offices across the country, you’ll notice that everyone has the same job and seems a little tired. There doesn’t seem to be anywhere to go, so no one is leaving. No one is being fired because it would be expensive and risky to hire new people. The machine is moving, but not faster.
Laura Ullrich, who is in charge of economic research in North America at Indeed Hiring Lab, put it very simply when she said that the job market is like slack water, which is the still, suspended time between tides. This description hits home because it shows what statistics alone can’t: the sense of stagnation that millions of workers and job seekers are going through right now. We send out resumes. It’s quiet again. People don’t move. Months go by.
But economists are becoming more and more sure that AI is changing what employers want, even if it hasn’t changed the number of jobs yet. Ger Doyle of ManpowerGroup said that the opportunities that are causing growth now need a very different set of skills than they did even two or three years ago. It’s not that jobs have gone away. The people who want jobs don’t match the jobs that are being made available, and the people who already have jobs aren’t sure they want to leave them. From a distance, that difference looks like calm, but it’s actually friction. It’s not calm. We’re stuck.
Take some time to think about the AI part. Technology companies used to hire a lot of people quickly, but now they are one of the industries that is cutting jobs the fastest. Firms are reorganizing by automating middle-level tasks, merging roles, and rethinking what a team even is. This hasn’t caused mass unemployment, but it has caused mass uncertainty, which is almost as bad. As workers watch their fields change, they decide that the safest thing to do is nothing. Employers come to the same conclusion from the other side because they don’t know what will happen in the next quarter.
Slack water is dangerous because it seems stable until it’s not. Ullrich herself warned that the balance depends on the number of separations and hires staying low. If there are a few more quits and a few more layoffs, the current balance could quickly shift to the downside. There wouldn’t be to much trouble. It would need a push.
One could almost say that a labor market that has stopped making decisions is philosophical. Every morning, millions of people go to work at jobs they would quit if they could, for companies that would hire if they dared. The economy is stuck between fear and hope, waiting for a tide that hasn’t shown its course yet. There is no movement in the water. But the current is changing below. It only remains to be seen which way it breaks.
