In what analysts are calling the “Great Freeze,” the US labour market has reached a curious stand-still: companies are neither aggressively hiring nor actively cutting jobs, and employees find themselves caught in the middle with few forward-moving opportunities.
Despite a broadly positive economic backdrop, companies have adopted a markedly cautious stance towards staffing decisions. Layoffs have slowed compared with recent peaks, yet hiring remains muted. Some of the contributing factors include uncertainty about trade tariffs, the growing impact of automation and artificial intelligence (AI), and tightened immigration policies.
Job turnover rates provide a striking illustration of the mindset shift. According to a recent poll by ZipRecruiter, employee turnover dropped from around 177 % in 2023 to approximately 50 % in 2025. The firm found that in 2024 only 24 % of employers cited external economic factors as significant drivers of lower turnover — but the share rose to 30 % in 2025. That suggests an increased recognition among employers that the external environment is less predictable, prompting them to hold on to their current workforce.
Moreover, 76 % of companies surveyed say they intend to prioritise retaining existing staff in the coming year. This approach — sometimes referred to as “job-hugging” — means fewer opportunities exist for workers to jump into new roles or make career-advancing moves. In effect, many employees face stagnation: limited job openings, reduced turnover, and slower internal promotion paths.
Even though firms are profitable and consumer spending remains stable, this combination of factors is restraining meaningful changes to workforce size or composition. According to Bank of America senior economist Stephen Juneau, businesses have little incentive to reassess head count as earnings remain positive and there is no pressing catalyst to expand or shrink operating staff.
On the hiring front, there are moderate signs of potential loosening: in a recent report companies indicated that 63 % expect to increase hiring, especially for entry-level positions that were hardest hit during the slowdown. But even here, the phrasing is cautious. Companies say they intend to hire, not that they’re already doing so at pace. Analysts caution that unless other conditions change, the market may remain muted.
For job seekers the consequences have been concretely felt. At the end of August, there were reportedly 7.2 million job openings compared to 7.4 million workers without jobs — nearly matching figures that show little slack for job seekers in terms of available opportunities. With fewer openings and less turnover, many workers are accepting roles that may not fit their skills or compensation expectations, and internal opportunities for advancement have become scarce.
Immigration restrictions also factor into the freeze. With fewer workers coming through channels such as the H-1B visa programme, some firms are less able to tap into labour supply from abroad, reinforcing the “hold steady” posture. As AI and automation increasingly replace certain job categories, the pressure and incentive to restructure staff can shift from head-count change to transformation of roles — and many companies appear to be choosing the latter path for now.
In sum, the US labour market’s current state is one of inertia: businesses remain profitable yet cautious, job flows are low, and workers are largely stuck in place. Unless a clear external trigger emerges — such as major policy change, new technology adoption wave, or sharp economic shock — the “Great Freeze” may persist well into the next year. Analysts warn that this means job-seekers should temper expectations and consider broader strategies for career movement, as the conventional dynamic of “quit one job, move to a better one” is less viable in this environment.
