America’s labor market is flashing red, and the Federal Reserve is watching the light change instead of hitting the brakes. Job openings have fallen to 7.26 million, the lowest level in 4½ years. Private-sector hiring has turned negative, with September’s ADP data showing -32,000 jobs after August was revised down to -3,000. Employers’ plans to add workers have plunged 71% from last year, and year-to-date hiring announcements are the weakest since 2009. The Fed must move decisively by cutting rates 50 basis points in both the October and December meetings to prevent further deterioration in employment and restore confidence to the private economy.
For the first time since early 2021, there are more unemployed Americans than job vacancies. If the Fed waits until 2026 to cut rates meaningfully, it will be too late. Monetary policy works with long and variable lags. By the time a policy shift filters through credit markets and small-business balance sheets, another million jobs could be lost.
Large corporations have the cash buffers to ride out higher rates. Small businesses do not. The Main Street employers who generate two-thirds of all new private-sector jobs and nearly 44% of U.S. GDP require lower costs of capital and a continued regulatory unwind by the Trump administration.
In “Rethinking Economic Growth,” I chronicled the real-world effects of these pressures across twelve industries, from wooden pallets to specialized transportation, energy handling, and equipment manufacturing. Each case study revealed the same truth: When financing dries up, expansion stops, hiring freezes, and communities suffer.
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