Jerome Powell Warns Net Job Creation in US Hits Zero

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Federal Reserve Chair Jerome Powell says US job growth has basically hit zero, meaning the economy isn’t adding new jobs overall. 

While unemployment is still low, fewer workers are entering the market, keeping things balanced but stagnant.

Jerome Powell on Job Creation in the USA

On March 18, 2026, Federal Reserve Chair Jerome Powell stood before reporters following the Fed’s latest policy meeting.

But something is interesting, he said about the job market in the USA:

“The thing that a good number of people on the committee are concerned about is just the very low level of job creation.

If you adjust what has been the trend in job creation over the past six months, if you adjust that for what our staff thinks is the overstatement due to overcounting, effectively, there is zero net job creation in the private sector.”

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That is not a misquote. He said out loud that, after accounting for revisions over the past six months, hiring in America has flatlined.

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He begins by noting that many members of the Federal Reserve are worried about how little job creation is happening right now. 

Normally, a healthy economy adds a steady number of jobs every month, but recent data shows that this pace has slowed significantly. 

To get a clearer picture, the Fed doesn’t rely on a single month’s data. Instead, it looks at trends over several months to smooth out short-term fluctuations. Even then, the average job growth already appears weaker than expected.

However, Powell goes a step further by saying that even this data may be overstating reality. Government job reports, especially early estimates, can sometimes overcount jobs due to technical reasons like double-counting people who switch jobs quickly or delays in updating records. 

The Fed’s internal analysts attempt to adjust for these issues to get a more accurate estimate. After making those corrections, Powell explains that the situation becomes much more concerning. 

In other words, there is effectively zero net job creation in the private sector.

This doesn’t mean companies have stopped hiring altogether. Of course, there are layoffs, but still, they need new people.

Some people are getting jobs, but others are losing them at almost the same rate. 

The result is a stagnant labor market that isn’t expanding. 

For the Federal Reserve, this is a warning sign. Job growth is a key driver of economic momentum, and when it stalls, it suggests the economy may be losing strength beneath the surface, even if headline numbers still appear stable.

He called the level of job creation “very, very low, nonexistent, really.” That kind of language from a Fed Chair is extraordinary. Central bankers are typically careful, measured, and full of qualifications.

What the Numbers Actually Show

The U.S. Bureau of Labor Statistics reported that the economy shed 92,000 jobs in February 2026. The unemployment rate, meanwhile, climbed to 4.4%, with 7.6 million Americans counted as unemployed. That is up from 4.3% in January.

But it gets worse when you look backward. The December 2025 jobs number was revised to a loss of 17,000. January was revised down by another 4,000. Combined, December and January were 69,000 weaker than the public was initially told.

Taking it all together, total job gains across 2025 came to roughly 584,000, which is the weakest year for employment growth outside of a recession since 2003.

3 forces are driving the drop in hiring in various sectors:

1. AI Is Replacing Entry-Level Work: Powell had acknowledged that AI is increasingly shaping the labor market. Entry-level roles in writing, coding, data entry, customer service, and analysis are quietly disappearing, replaced by software that works faster and costs less.
2. Immigration Has Collapsed: One of the lesser-discussed reasons the U.S. economy no longer needs as many new jobs is that there are fewer people available to fill them. Net international migration dropped from 2.7 million (July 2024) to 1.3 million, a direct result of aggressive immigration enforcement.
3. Federal Government Has Shed 330,000 Jobs: While the private sector flatlines, the public sector has been actively contracting. Federal government employment is down 330,000 jobs since its peak in October 2024. Healthcare employment fell sharply in February due to strike activity. 

In response to this, the Federal Reserve voted to hold its benchmark interest rate steady. The concerns of war in the Middle East also didn’t help the FOMC to change its mind.

However, there are some positives: consumer spending is good, and business investments are growing.

Bottom Line

Jerome Powell did not mince words at the press conference. He described a labor market in which the private sector has stopped growing, the government is actively shrinking, AI is absorbing work that used to belong to human beings, and an overseas war is making the path to recovery even narrower.

Still, this net-zero job growth can slow down economic growth. If fewer people are working, overall production and spending slow down.

The U.S. economy hasn’t crashed. But it also isn’t moving forward. And in economics, standing still is rarely a good sign.