The JOLTS Report Shows a Healthy Labor Market, Not a ‘Sluggish’ One
The March JOLTS report dropped Tuesday morning and the Associated Press immediately informed the nation that the labor market “remained sluggish.” That’s a strange way to describe a report showing hiring surged by 655,000 to 5.6 million, job openings held steady at 6.9 million, and the quits rate ticked up — all consistent with the March payrolls report that showed 178,000 new jobs and unemployment falling to 4.3 percent.
So, why does it look “sluggish” to the Associated Press? It’s tempting to write this off as pure Trump Derangement Syndrome. There’s an overwhelming urge in the legacy media to describe anything happening in America as “troubled” or unhealthy so long as President Donald Trump is in the White House. The same outfits that downplayed the surge in inflation under Biden cannot stop talking about an “affordability crisis” now that Trump is in office.
But there’s something deeper going on here, something that even some supporters of President Trump have missed. The deeper error comes from measuring today’s labor market against the pandemic-era hiring bubble of 2021-2022, when job openings hit 12.3 million and hires routinely topped 6.5 million a month. That was an anomaly driven by unprecedented monetary accommodation, fiscal stimulus, pent-up demand, and massive labor reallocation. Nobody at the time thought those levels were sustainable or healthy. Using them as the baseline for what “normal” looks like is like calling a runner slow because he’s no longer sprinting after the starting gun.
JOLTS in a Historical Context
The actual historical record tells a very different story. We ran the March numbers against the full 25-year JOLTS dataset. Hires at 5.6 million rank at the 87th percentile of the pre-pandemic era. Job openings at 6.9 million rank at the 91st percentile. Those are not sluggish numbers by any standard. They indicate that we’re near peak hiring and openings for an economy that is not just emerging from a crisis. Current openings exceed the peak of the entire pre-Great Financial Crisis expansion, when the highest reading was 5.2 million. They’re above the average of the strong 2017-2019 labor market. Hires are running above the average of every pre-pandemic period in the data.
And today’s numbers are actually more impressive than the historical comparisons suggest, because earlier periods of similar hiring levels occurred when unemployment was far higher. During the post-GFC recovery, monthly hires averaged around five million — but unemployment was six, seven, even eight percent. There was an enormous pool of available workers waiting to be absorbed. Today we’re hiring at a higher rate from a much tighter labor pool. Each hire is doing more economic work.
The AP story also noted that employers added fewer than 10,000 jobs a month last year, calling it the weakest outside a recession since 2002. This is a widely quoted figure that’s true on its face but deployed solely for the purposes or with the effect of misleading people. Research from the Dallas Fed published in March shows that the break-even employment rate — the number of jobs the economy needs to add each month to keep unemployment stable — has fallen essentially to zero. It peaked at around 250,000 per month in 2023 when immigration was surging, dropped to about 10,000 by mid-2025, and actually went slightly negative in the second half of the year as net unauthorized immigration outflows averaged 55,000 per month. As the Dallas Fed economists concluded, payroll gains that might historically have signaled slack are now consistent with a balanced labor market. Far from being anemic, 10,000 jobs a month was running above break-even.
Against the Slugs
What the JOLTS data actually describe is a healthy labor market operating under new structural conditions. Openings are normalizing as employers adapt to supply constraints by investing in automation and retention rather than endlessly posting jobs they cannot fill. The quits rate is low not because workers are trapped but because employers are competing harder to keep people, improving conditions and compensation. Hiring surges when growth confidence returns — as it did in March — because firms know that the window to add workers is narrow in a supply-constrained environment.
We try not to be too hard on the sluggish types who misread today’s labor market. Adjusting to a full employment mindset after decades of insufficient labor demand is no easy task. But it’s a task required to understand the economy in 2026.
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