U.S. employers are still holding on to workers, but job openings fell again in August. The result is a labor market offering considerably more protection to people who already have jobs than opportunity to those looking for one.

The U.S. labor market is producing two very different experiences depending on which side of the payroll someone is standing. Employers laid off relatively few workers in August, with layoffs and discharges falling by 61,000 to 1.641 million, according to the latest federal Job Openings and Labor Turnover Survey. But Reuters reports that available jobs moved in the opposite direction, falling by 256,000 to 7.079 million. Hiring increased by only 46,000 to 5.192 million. For workers already employed, those numbers point to continued job stability. For someone trying to get hired, switch companies or enter the labor market, they describe a much tighter doorway.

Low Layoffs Are Carrying the Market

The labor market’s stability is increasingly being sustained by employers choosing not to fire the people they already have. The layoffs rate slipped to 1.0% in August, while the hiring rate rose only slightly from 3.2% to 3.3%. Economists cited by Reuters described historically low layoffs as one of the primary reasons employment conditions remain relatively steady even as companies hesitate to expand their workforces. That produces a labor market that can look solid in headline statistics while still feeling difficult to people actively searching for work.

Job openings now stand at roughly 1.01 for every unemployed worker, according to Reuters, down from 1.06 in July and dramatically below the roughly two openings per unemployed worker seen at the height of the post-pandemic hiring boom in 2022. The decline was not concentrated in a single industry. Professional and business services recorded 119,000 fewer openings, healthcare and social assistance had 115,000 fewer, and vacancies also declined in manufacturing, construction and parts of state and local government. Retail, leisure and hospitality and information were among the areas where openings increased.

The Advantage of Already Having a Job

For people currently employed, low layoffs create a degree of insulation from the slowdown. Companies appear reluctant to lose experienced workers even when they are cautious about adding new positions. For job seekers, the same caution translates into fewer opportunities and more competition for each opening. Workers who might otherwise leave for a better-paying position may also be responding to those conditions: the quits rate, often treated as a measure of employees’ confidence that they can find another job, remained at 1.9%.

That dynamic helps explain why the labor market can simultaneously generate relatively healthy employment numbers and widespread anxiety about finding work. Nonfarm payrolls increased by 162,000 jobs in August, the strongest increase in five months, but consumer perceptions of the labor market are weakening. A separate Conference Board report released Tuesday showed U.S. consumer confidence falling to its lowest level in roughly 12½ years, with respondents increasingly concerned about future employment and business conditions. The measure comparing consumers who say jobs are plentiful with those saying jobs are hard to get narrowed sharply in September.

A Labor Market Built Around Retention

Employers are also operating in an economy where the reasons to delay hiring are accumulating. Reuters cited uncertainty around inflation, energy costs and economic conditions as factors contributing to corporate caution. Businesses do not necessarily need to believe a downturn is imminent to postpone adding another employee; uncertainty itself can make waiting the safer option. Holding on to existing staff protects operational capacity while avoiding the longer-term payroll commitment that comes with expanding headcount.

That creates a labor market built more around retention than expansion. People with jobs are benefiting from companies’ reluctance to cut deeply, but that same caution is making it harder for outsiders to move in. The difference is increasingly visible in the ratio of openings to unemployed workers, the subdued quits rate and the gap between low layoffs and modest hiring. For anyone trying to assess the health of the job market, unemployment alone no longer tells the whole story. The increasingly important question is not simply how many people are losing jobs, but how many doors are opening for the people who need one.