U.S. job openings dropped to 6.9 million in February 2026, with hiring rates at their lowest since April 2020, as businesses grow cautious amid rising gasoline prices from the Iran war and uncertainty over AI’s impact on employment.
The U.S. labor market showed further signs of weakness in February, with job openings falling to 6.9 million, down from 7.2 million in January, according to the Labor Department’s Job Openings and Labor Turnover Summary (JOLTS) report AP News. This decline accompanies a rise in layoffs and a historic drop in the number of workers voluntarily leaving their jobs, painting a picture of a market where employers are hesitant to hire and employees are reluctant to quit.
The JOLTS data reveals a multi-faceted slowdown:
- Job openings decreased by 300,000 from January to February.
- Layoffs increased, though specific numbers weren’t provided in the blurb.
- Quits fell to 2.97 million, the lowest since August 2020.
- Gross hires dropped to 4.85 million, the fewest since April 2020.
- The hiring rate fell to 3.1%, also the lowest since April 2020.
These figures are particularly alarming because they reach lows last seen during the height of the COVID-19 pandemic, when economic activity was largely shut down. Now, two years later, the labor market is sputtering despite low unemployment.
Economist Christopher S. Rupkey of fwdbonds directly links this downturn to the Iran war, which has driven gasoline prices up by over a dollar per gallon. “The drop in openings as the Iran war started is not a good omen for the health and vitality of the labor market. Companies have grown more cautious as the price of gasoline has risen… and consumers have become much less confident,” he wrote AP News.
Beyond geopolitical shocks, structural forces are at play. The U.S. job market has struggled over the past year, with employers adding fewer than 10,000 net jobs per month in 2025—the weakest hiring outside a recession since 2002 AP News. This year began with a modest 126,000 jobs in January, but February saw a loss of 92,000 jobs. While March is expected to rebound with 60,000 jobs, the overall trend remains concerning.
A key factor behind this hesitation is artificial intelligence. As companies grapple with how to integrate AI, they are delaying hiring decisions, particularly for entry-level positions that AI might automate. This uncertainty compounds the effects of high interest rates and shifting trade policies under President Donald Trump, creating a perfect storm of caution Yahoo Tech.
Paradoxically, the unemployment rate remains low at 4.4% AP News. This reflects a “low-hire, low-fire” dynamic: companies are reluctant to add staff but also hesitant to let go of existing workers. This stability masks underlying weakness, as the labor market fails to generate the churn that typically indicates health—people quitting for better jobs and being replaced.
What does this mean for American workers? The declining quits rate suggests diminished confidence in finding better opportunities. With AI threatening entry-level roles and businesses scaling back, workers may face prolonged stagnation in wages and career progression. The combination of high gasoline prices and economic uncertainty further strains household budgets.
Looking ahead, the March jobs report will be crucial. If hiring rebounds as expected, it may offer temporary relief, but the fundamental issues—AI disruption, geopolitical volatility, and policy uncertainty—will likely persist. The labor market’s trajectory points toward a prolonged period of subdued growth, with potential ripple effects across the broader economy.
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