The economy has entered a “low-hire, low-fire,” state, according to Federal Reserve Chairman Jerome Powell, meaning that it can avoid a recession even as job growth slows.

Hiring has slowed significantly in recent months, raising fears about a downturn.

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But layoffs are also low, meaning that unemployment overall is still low by historical standards.

“It feels like companies are just — they’ve kind of stopped hiring or slowed down their hiring, because they want to see how this all shakes out,” Powell said in a speech this week at the Greater Providence Chamber of Commerce.

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Indeed economist Cory Stahle told the Washington Examiner that Powell’s comments mesh with the data he has been analyzing.

The hiring rate in July, sourced from Bureau of Labor Statistics data, was sitting at 3.3%. Outside of recent years, that is the lowest the hire rate has been since 2013.

“So we’re basically sitting at a point now where the hires rate is the lowest it’s been in a little over a decade and has continued to move sideways,” Stahle said.

And at the same time, the layoff rate is also relatively low. The seasonally adjusted layoff rate was sitting at 1.1% in July. The layoff rate has largely been down since the post-pandemic hiring boom and about where it was at before the pandemic.

Harry Holzer, a nonresident senior fellow with Brookings, noted that several factors have played into the low-churn scenario.

“Interestingly, there’s a bit of a debate about whether that’s more a demand issue or supply issue,” Holzer told the Washington Examiner.

President Donald Trump has cracked down on illegal immigration hard since coming into office in January. That means that there are fewer people in the labor force, which has slowed hiring in recent months.

The labor market is most challenging for recent college graduates and young people, who have been struggling to find work.

Holzer said there are a few possible contributors to that. The first, and most obvious, is the overall weaker economy and declines in employer hiring. Holzer said, though, that the rapid advancement of artificial intelligence might also be partly to blame. AI might be eliminating some of the entry-level work that younger members of the labor force used to rely on.

Holzer also said there has been an increased focus on skills-based hiring. Basically, employers are putting less weight on a college degree alone, and are gravitating to those who have more experience, making it tougher for new graduates.

Jeffrey Roach, chief economist for LPL Financial, pointed to the Washington Examiner that, during the post-pandemic hiring boom, many employers were having a difficult time finding workers. Now, he said, they could be holding onto workers even if sales are down to prevent a similar set of circumstances.

“We can’t afford to let them go because we’re nervous about having to go through that process again,” Roach said of the employers’ possible thinking.

Beyond the low-fire, low-hire scenario, the labor market is showing some signs of distress, including rising black unemployment.

The unemployment rate rose to 4.3% in August, up from 4% at the start of the year, but the black unemployment rate has shot up by a much larger degree, rising to 7.5% last month, an increase from 6% just three months ago. Some research shows that black workers tend to be affected first when there is a labor slowdown.

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But many economists think that the baseline is essentially that the labor market will continue to keep moving sideways, barring any shocks.

“Right now, it does look like we’re going to keep treading water for a while,” Holzer said. “I think people are going to stay in this holding mode for a while longer.”