JOLTS Report Indicates a Healthy Labor Market
On Tuesday morning, the March JOLTS report was released, and the Associated Press quickly characterized the labor market as “depressed.” That seems a bit off, considering the report showed a significant increase of 655,000 employees, bringing the total to 5.6 million. Job openings remained steady at 6.9 million, and the turnover rate was up. This aligns with the March payroll report, which indicated 178,000 new jobs, and an unemployment rate that dropped to 4.3 percent.
So, why does it appear “dull” to the Associated Press? It’s easy to chalk this up to a kind of Trump derangement syndrome. The legacy media often has this tendency to frame situations negatively, particularly with Donald Trump in office. The same media that downplayed inflation under Biden seems to focus on a “price crisis” now that Trump is at the helm.
But there’s something else at play here, something that even some of Trump’s supporters might overlook. The issue is comparing today’s labor market with the pandemic-era employment bubble. During 2021-2022, job openings peaked at 12.3 million, alongside monthly employment figures consistently over 6.5 million. That was an exceptional period fueled by unprecedented monetary policies, fiscal spending, and pent-up demand. Nobody considered that level sustainable or healthy. Using those standards for “normalcy” is a bit like calling a runner slow for not sprinting after the starting gun.
Historical Context of JOLTS
When we evaluate the March numbers against a 25-year dataset of JOLTS, a different picture emerges. Employment stands at 5.6 million, putting it in the 87th percentile pre-pandemic. Similarly, job openings are at 6.9 million, ranking in the 91st percentile. By any measure, those aren’t low figures; they indicate we are approaching peak employment and recruitment. For an economy emerging from crisis, current job openings are notably higher than the 5.2 million during the expansion leading up to the Great Financial Crisis, exceeding averages from a strong labor market seen from 2017 to 2019. Hiring rates now surpass those averages seen prior to the pandemic.
In fact, today’s figures are more noteworthy than past comparisons suggest. Similar employment levels in earlier times coincided with much higher unemployment. For instance, after the global financial crisis, average monthly employment hovered around 5 million while unemployment rates reached 6, 7, and 8 percent. There was an abundance of workers available. Currently, we’re hiring more from a much tighter workforce. It seems each employer is more discerning about job offerings.
The Associated Press also highlighted that fewer than 10,000 jobs were added monthly last year, the weakest pace outside a recession since 2002. While that figure is accurate, it’s often used to mislead. A study released in March by the Dallas Fed indicated the breakeven employment rate—essentially the number of jobs needed to stabilize unemployment—is close to zero now. It peaked around 250,000 monthly in 2023 during an immigration boom but has since dropped to about 10,000 by mid-2025, even turning slightly negative recently due to net outflows of illegal immigrants. Dallas Fed economists say that salary increases, which typically indicated a loose economy, are now decreasing, consistent with a balanced labor market. In fact, adding 10,000 jobs a month is more than adequate to meet breakeven.
Understanding the Current Landscape
What the JOLTS data really shows is a healthy labor market adapting to new structural conditions. Job numbers are normalizing, as employers are investing in automation and retaining talent rather than just posting more positions they can’t fill. Low turnover isn’t due to workers being trapped; rather, there is a growing competitive landscape for retaining employees, along with improvements in work conditions and compensation. Hiring rates tend to spike when businesses gain confidence in growth, as was the case in March—companies recognize they have limited chances to expand in a supply-constrained environment.
We try not to judge those who misinterpret today’s labor market too harshly. Adjusting to the notion of full employment after decades of labor shortages is undoubtedly a challenging transition. However, it’s a necessary step to grasp the economy we face in 2026.
