Job Huggers and Hoppers Navigate the Labor Market
The job market is in a strange place. Every month when we think that the labor market is a-ok, another month comes along to upend that description. To wit, there seemed to be a summer slowdown in the market (June added just 31,000 jobs, July lost 10,000, then August was up 133,000), and along comes the September employment report with just 29,000 jobs, far less than forecast.
With this kind of performance, you might think that the unemployment rate would be zooming higher, but it isn’t. The rate has been hovering between 4.1 and 4.4 percent this year and landed at 4.2 percent most recently. As a reminder, the rate is derived from the Current Population Survey, where interviewers determine the number of people employed and also those who are unemployed and actively seeking to find a job. The total of those two groups makes up the labor force, and the rate is determined by dividing the unemployed by the labor force.
The economy used to need to produce about 150,000 jobs per month to keep up with the number of people who wanted to work. With the Trump Administration’s immigration policies and boomers retiring, there are fewer workers in the labor market, which means the number of jobs needed to keep the unemployment rate steady is likely around 50,000 per month. This year, we’re averaging 68,000 per month.
Other labor market indicators show more stability: layoff announcements have dropped, new claims for unemployment insurance have been below 200,000 for the past three weeks, and continuing claims touched a three-year low this week. Overall, while the market may not be on fire, it is holding up, and it appears that employers are still operating in a low hire/low fire environment.
One area to highlight is wages. According to the report, average hourly earnings were up 3 percent from a year ago, the lowest level since spring 2021, and importantly, below the inflation rate of 3.4 percent. This dynamic is likely contributing to the trend of multiple job holders, which is nearly nine million, the highest since November 2025. The underlying anxiety about the job market also shows up the quits rate, which remains at a post-pandemic low.
The mercurial nature of the labor market, combined with looming fears of AI’s impact, has meant that many of those who have jobs are clinging to them. These so-called “job huggers” are unwilling to take the risk of changing jobs, but there could be a good incentive for doing so. For those workers willing to make a move, the pay premium for job switching has risen to the highest level in more than three years. According to research from Bank of America, Gen Z has benefited the most from changing jobs. Notably, hourly paid workers are also making particularly large gains from switching.
Whereas in the changing jobs frequently was seen as a sign of being flighty or unreliable, the narrative has flipped. Recruiters cite a report from Rutgers University that shows that job hoppers are good at adapting quickly. While most new hires needed an average of five months to get up to speed, the analysis found that those with a history of changing jobs needed just two months, and they had smaller performance declines. This suggests that job hoppers might have the edge in organizations that demand immediate results and prioritize adaptability.
To start/restart your job search, you will need to leapfrog AI filters and use every possible human connection that you have. Start with general conversations with your family, your family’s friends, or anyone who can pluck your resume out of obscurity and route it to the right person at an organization.