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- Explaining The "No Hire, No Fire" Job Market
Explaining The "No Hire, No Fire" Job Market
The Macro Institute's Weekly Economic Primer
The Macro Institute
January 26, 2026
In partnership with
Don’t have time to watch the whole video? Here’s 5 Key Takeaways:
🔹 Relationship Between Hiring & Firing Has Broken Down: The traditional inverse relationship between the hiring rate and layoff rate has diverged. Companies are not hiring many people, but are hesitant to move forward with layoffs.
🔹 Overall Uncertainty Is The Main Culprit Of This Trend: Businesses and consumers both feel uncertain about their economic futures. This has sent a freeze over the labor market as companies hold still and employees are afraid to quit.
🔹 Tight Labor Markets Are Scaring Businesses: Despite the uncertainty, businesses are afraid to lay people off due to the lack of available workers. Plus, following the pandemic the reservation wage spiked as people left the workforce.
🔹 Employees Are Afraid To Quit Their Jobs: Consumers are feeling highly uncertain about the health of the U.S. economy. A majority do not think they would land a job within three months if they quit or were fired.
🔹 AI Is Adding Fuel To The Fire: The uncertainty felt by businesses and consumers is only multiplied when AI enters the equation. Businesses are quite split on whether or not AI will lead to them needing less or more employees in the future.
Miss our last few videos? No worries. Check them out below 👇
1) Understanding The Role Of Inflation In The Business Cycle
2) Should America Rebuild Its Manufacturing Base?
3) Everything You Need To Know About PMIs
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Macro Data Center
The Macro Week Ahead
📆 Last Week’s Data Key Takeaways
🔹 Consumers Kept Spending + Inflation Firmed: Personal income rose +0.3% (m/m) while spending rose +0.5%. Meanwhile, PCE inflation ran +0.2% (m/m) and 2.8% (y/y). Core PCE was also +0.2% and +2.8% m/m and y/y respectively.
🔹 GDP Came In Hotter Than Earlier Prints: The updated estimate showed real GDP running at a 4.4% annual rate in Q3 2025. The strength is largely tied to consumer spending, government spending, and investments.
🔹 PMIs Still Expanding, But Steady: S&P Global PMIs stayed in growth territory with Manufacturing at 51.9 (Dec: 51.8), Services at 52.5 (Dec: 52.5), and Composite at 52.8 (Dec: 52.7). Price pressures remained elevated in the survey.
🔹 Michigan Sentiment Slightly Improved: Consumer sentiment ticked up to a final 56.4 in January, while 1-year inflation expectations eased to 4%. This is the lowest inflation expectations number since January 2025.
🔹 “No Hire, No Fire” Still Intact: Initial jobless claims were basically unchanged at 200k, while continuing claims fell to 1.849M. Layoffs remain contained, while the broader hiring vibe is subdued.
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