The Labor Market: A Historical Perspective
The latest weekly unemployment insurance claims came in at 215,000, which is quite low. Even more striking is that the average for the first half of this year stands around 213,000.
To really grasp how this compares historically, we have to look back to 1968 and 1969. Back then, the workforce was less than half of what it is today, influenced heavily by the Vietnam War draft that pulled countless young men out of civilian jobs. It was a tremendously tight labor market.
Oddly enough, even during the economic growth of the initial Trump presidency, we never saw numbers this low over a six-month period. Sure, they dipped again in the latter half of this year, but post-pandemic, the economy has seen an unusual boom from 2022 into 2023.
The surprisingly low rates of layoffs—since unemployment claims can serve as an indicator of layoffs—are critical for a couple of reasons. First, they challenge the whole idea that artificial intelligence is taking away jobs. Second, this trend isn’t really acknowledged or celebrated by many.
Most traditional media tends to depict the labor market as having fewer job openings and layoffs, but that doesn’t tell the full story. We aren’t in a period of scarce employment. Since January, the economy has added about 3.1 million jobs before any seasonal adjustments. Even on a seasonally adjusted basis, jobs increased by 392,000, despite a loss of 157,000 jobs in February. Since then, an additional 548,000 jobs have been added, averaging about 137,000 a month. It’s far from a stagnant labor market.
Healthcare Sector Trends
So, why are layoffs so rare these days? A significant part of the answer seems to be the growing employment in healthcare. This sector now makes up roughly 15% of all non-farm jobs, up from 13.2% in 2016 and a mere 10.2% in 2001. Since January 2025, healthcare has added around 410,000 seasonally adjusted jobs, while other sectors have only seen a net increase of 208,000. In June 2026 alone, healthcare contributed 22,000 of the modest total increase of 57,000 jobs.
Data from the Labor Ministry indicates that the layoff rates in healthcare and social assistance are notably low. During the post-financial crisis recession, for example, even the layoff rate peaked at just 1.4%, which is significantly lower than the broader economy’s peak of 2%. Recent JOLTS data shows that the layoff rate in healthcare and social assistance rests at 0.9%, better than the overall economy’s figure of 1.2% and particularly favorable compared with professional and business services.
As more workers find stable positions in sectors resistant to layoffs, the overall economy experiences a decline in layoff rates. This shift in job composition is reflective in the data—there’s a noticeable reduction in job losses.
But, of course, simply increasing the number of medical workers isn’t the whole picture. The recent focus on border security has limited new worker entry and increased the worth of existing employees for employers. Many companies opt to keep their retired workforce instead of laying off current employees, lessening the need for cuts. Moreover, rising productivity and record profits have bolstered the value of workers on the payroll. When companies are financially strong, they face less pressure to downsize. Shifts in trade policy have also eased the strain on businesses to offshore jobs.
Unless a significant political shift occurs—favoring a return to globalism, open borders, and deindustrialization—this situation is unlikely to change. With an aging population, a substantial portion of the healthcare workforce will be essential, which could maintain consistent downward pressure on layoffs.
