{"id":15108,"date":"2026-09-21T17:23:38","date_gmt":"2026-09-21T17:23:38","guid":{"rendered":"https:\/\/www.rbc.com\/en\/economics\/?p=15108"},"modified":"2026-09-21T17:23:39","modified_gmt":"2026-09-21T17:23:39","slug":"how-to-monitor-the-persistent-tightness-in-the-us-labor-market","status":"publish","type":"post","link":"https:\/\/www.rbc.com\/en\/economics\/us-analysis\/us-featured-analysis\/how-to-monitor-the-persistent-tightness-in-the-us-labor-market\/","title":{"rendered":"How to monitor the persistent tightness in the US labor market"},"content":{"rendered":"\n
\n
\n

The US labor market has improved in 2026, adding an average 80,000 new jobs a month compared to less than 10,000 a month in 2025\u2014 highlighting our view on why it\u2019s hard to bet against the US economy.<\/a><\/p>\n\n\n\n

We continue to expect the job market will remain tight<\/a> even as the Federal Reserve hikes interest rates. But importantly, that tightness shouldn\u2019t be measured by net job creation (i.e., payroll growth) as before, because this indicator\u2019s signal has diminished. Instead, we lay out a selection of key of indicators to monitor for any unexpected slowdown before it materializes in the headline labor market data.    <\/p>\n\n\n\n

The core reason for a shift away from net payroll growth as a strong cyclical indicator is the ongoing decline in the break-even pace of employment\u2014the number of jobs the economy needs to add every month to hold the unemployment rate steady. While the range can be quite wide, (15,000 to 87,000, according to the Federal Reserve Bank of St. Louis\u2019 estimates<\/a>), we think it\u2019s around 20,000 jobs per month in 2026, driven by a historic move higher in retirements coupled with a slowdown of immigration. This leaves a native population structure that is top heavy\u2014more older workers than new entrants<\/a>. The result is the level of layoffs remains near an all-time low, which we see both in the household survey, and more importantly, administrative jobless claims data.<\/p>\n\n\n\n

<\/div>