An already unusual labor market that combines extremely low unemployment of 3.6% with soaring inflation at 6.0% has been made more unpredictable with the added wrinkle of bank failures. 

Uncertainty usually doesn’t bode well for job-seekers. Companies typically hold off on hiring until they’re certain they can navigate the choppy waters ahead, according to labor market experts.

“The approach that most businesses have when it comes to this kind of unforeseen event, and any increase in uncertainty, is to wait and see what will happen,” says Audrey Guo, a labor economics professor at Santa Clara University. 

During this wait-and-see period, which experts tell Fortune could last a few weeks, the job market is unlikely to see an increase in the number of people who are unemployed and see those out of work unemployed for longer. “With talk of deteriorating economic conditions and in the wake of the recent bank failures, businesses may turn more cautious in their hiring practices,” writes Stuart Hoffman, a senior economic advisor at PNC Financial Services Group, in an analyst note. 

While it is too early to say definitively—the most recent February jobs report doesn’t include data since the various bank insolvencies—a potential hiring freeze is less a reaction to imminent financial peril and more so a desire to understand the full extent of the ramifications of aforementioned bank failures. If SVB, Signature, and First Republic are exceptions, hiring could quickly resume as it did before their collapse. 

“If we don’t see any more bank failures in the next couple of weeks and continue to chip away at inflation, the broader economy—but maybe not technology—will go back to a more normal recruiting cycle,” says Meredith Meyer Grelli, a professor at Carnegie Mellon University’s Tepper School of Business.

Grelli excludes the tech sector from her comments because it was struggling prior to SVB’s implosion, so a return to pre-banking crisis normalcy might still feature hiring struggles. However, economists take the Fed’s Wednesday announcement that it will raise interest rates by a quarter of a percent as a positive sign. 

“It says inflation is our primary concern, and bank failures aren’t,” Grelli says. “Interest rates had to rise again, and it would be far more concerning if the Fed said the banking system is too fragile for us to take this action.”

Paolo Confino
paolo.cofino@fortune.com
@paolo1000_

Reporter's Notebook

The most compelling data, quotes, and insights from the field.

Indeed’s CEO Chris Hyams announced on Wednesday that the company will lay off 2,200 employees, approximately 15% of its workforce. 

“With future job openings at or below pre-pandemic levels, our organization is simply too big for what lies ahead,” Hyams told staff. “We have held out longer than many other companies, but the revenue trends are undeniable.”

Around the Table

A round-up of the most important HR headlines, studies, podcasts, and long-reads.

- Tech executives continue to lambast laid-off employees, accusing them of doing “fake work.” Insider

- Remote workers are more likely to be concerned about layoffs than hybrid or in-person employees. HBR

- Compare the layoff memos from 48 CEOs. About half refer to the company as a family. Washington Post

- Office rent in the most expensive U.S. cities has declined, finally reflecting the shift to remote work. Axios

- Employees and employers are gearing up for a contentious fight over ChatGPT’s use in the workplace. Wall Street Journal

Watercooler

Everything you need to know from Fortune.

The question at hand. Deloitte’s head of talent only needs one interview question to determine if a job candidate will be a good cultural fit. —Orianna Rosa Royle 

Now hiring. Ghost jobs—listings for jobs an employer doesn’t intend to fill—are on the rise because they project an air of confidence and imply to overworked employees that help is on the way. —Chloe Berger

Gender lawsuit. A former manager at Commerzbank’s London office won a discrimination lawsuit after a judge found the company denied her a promotion because she was a woman. —Chloe Taylor

Women at work. The number of unmarried women in the workforce grew three times faster than the general market. It starkly contrasts an otherwise lackluster labor force participation rate in the U.S. in recent years. —Megan Leonhardt