Job hugging is the new job hopping
Job-hugging is a new form of job-hopping due to the slowdown in the labor market.
The U.S. economy shed 92,000 jobs in February, the Bureau of Labor Statistics estimated on March 6, indicating the overall labor market remains in scarcity mode as employers continue to navigate tariff-related inflationary pressures, AI adoption, and geopolitical uncertainty.
February’s estimate is much lower than the BLS’ now revised January job gain of 126,000. That was much higher than the bureau’s revised figure for 2025, when U.S. employers added just 181,000 jobs over the year, or about 15,000 jobs per month.
Over the past year, economic output has continued to rise even as employment growth has slowed, suggesting that productivity per worker is increasing. David Royal, Thrivant’s chief financial and investment officer, said that while AI may be contributing to productivity gains, it is still too early to blame it for the entire gap between GDP and employment.
“I don’t think companies really understand the impact of AI on employment either,” Royal told USA TODAY. “They’re not ready to lay people off, but they don’t want to hire a ton of people because they don’t know if they’re going to be needed. I think that’s what’s creating an environment where there are fewer hires and fewer layoffs.”
The unemployment rate rose to 4.4% in February, up from 4.3% in January and up from 4.1% a year ago.. Bankrate senior economic analyst Mark Hamrick said ahead of the report that lower immigration and an aging workforce mean fewer new jobs are needed to stabilize rates.
What about the overall job market?
Employers announced 48,307 layoffs in February, a 55% drop from January and a 72% drop from February 2025, according to a March 5 Challenger, Gray & Christmas report.
Still, job seekers are struggling to find jobs, recent college graduates are competing with AI, and workers are holding onto jobs for fear of not getting a new job.
A third of workers surveyed by resume writing platform MyPerfectResume said they were worried about losing their job in 2026, and nearly half predicted the labor market would worsen further.
Private employers announced plans to hire 12,755 workers in February, a 140% increase from January’s 5,306, according to a report in Challenger. It said that so far this year, recruitment plans have declined by 56% compared to the first two months of 2025.
Will the Fed cut rates in March?
After cutting the federal funds rate, the benchmark national interest rate, three times late last year, the Federal Open Market Committee opted to suspend it at its last meeting in January.
Economists at Oxford Economics predicted on March 4 that the Fed would hold off on adjusting interest rates until it could assess the economic impact of the war with Iran, and that the FOMC would cut rates twice in 2026, with the first rate cut coming in June. The committee is expected to have a new chairman by then.
As of March 6, forecasters expect the FOMC to continue holding interest rates in the range of 3.5% to 3.75% at its next two-day meeting on March 17th and 18th. By then, commissioners will review February’s employment report and the BLS Consumer Price Index report, which will be released on March 11.
“They’ll probably focus more on the inflation numbers than the employment numbers. If inflation goes down, they’ll cut interest rates,” Royal said. “I don’t think we need to see more employment weakness because of job cuts, but I think we probably need to see more progress on inflation.”
This is a developing story and will be updated to add new information.
Contact Rachel Barber rbarber@usatoday.com X Follow her at @rachelbarber_
