KPMG's Diane Swonk: US Labor Market Now Low-Pace, Low-Hire

KPMG Chief Economist Diane Swonk has characterized the latest US employment situation as "a low-pace and low-hire environment," a formulation that compresses the two risks economists watch most closely in a cooling labor market: people losing pace in their careers and employers pulling back on bringing new staff aboard.

Swonk's read of the jobs report, delivered in commentary picked up by CNBC, centers on a labor market that has stopped adding workers at the rates posted during the post-pandemic recovery. The phrase "low-pace and low-hire" signals neither collapse nor strength — a plateau in which churn drops, vacancies stay thin, and job seekers face longer searches.

What does "low-pace and low-hire" mean for workers?

For individuals, the distinction matters more than the headline unemployment rate does. A "low-hire" market does not primarily punish people who hold jobs; it punishes people trying to enter or move within one:

• Recent graduates competing for a shrunken pool of entry-level openings
• Job switchers who lose wage-leverage when employers have queues of applicants
• Laid-off workers facing longer unemployment durations because re-hiring has slowed

A "low-pace" market compounds that. When hiring slows, even employed workers see promotions stall, raises shrink, and internal mobility freeze — because employers no longer compete against outside offers.

How does this fit the national picture?

Swonk, who leads economic analysis at KPMG and is one of the most widely cited private-sector forecasters on US payrolls, has built her recent commentary around the theme of a labor market that cools through reduced hiring rather than through mass layoffs. That pattern historically keeps the unemployment rate lower for longer while still eroding worker bargaining power beneath a stable headline number.

The audience-relevant translation: a jobs report can print without a surge in layoffs and still describe a materially harder market for anyone actively searching. Economists track hires and separations data — the flow measures — precisely because the stock measure of unemployment lags this kind of slowdown.

What should readers watch next?

Swonk's framing implies the forward indicators are hires per job seeker, quits rates, and the pace of payroll gains, rather than the unemployment rate alone. If hiring stays at low levels while layoffs remain contained, the market settles into exactly the environment she names: stable for the employed, unforgiving for the mobile.

Her analysis suggests the next several jobs reports will test whether the low-hire condition persists — and with it, how long job seekers' search periods extend.