The Bureau of Labor Statistics reported Tuesday the hiring rate fell to 3.1% in February, with just 4.8 million hires, the lowest since April 2020. Job openings dropped to 6.9 million, down 358,000 from January. The quits rate held at a low 1.9%, while layoffs also stayed pinned at 1.1%, and retirements fell back near record lows. Everyone, it seems, is staying put, whether in their jobs or in unemployment.

“It’s a brutal job market,” Heather Long, chief economist at Navy Federal Credit Union, told Fortune. “To see that 3.1% hiring rate, the lowest since April 2020, when the economy was closed down literally during COVID—it just underscores how little hiring is going on.”

The comparison to 2020 is what makes this report so jarring. Back then, hiring collapsed because businesses were physically shuttered. Today, unemployment is around 4% and businesses are open, but employers are still barely bringing anyone on.

A ‘locked-out market’ for new hires

Nicole Bachaud, labor economist at ZipRecruiter, wrote in a note it’s a “locked-out market” for new entrants, driven by a combination of stalled hiring and delayed retirements blocking the natural pipeline. 

“Aside from the 2020 dip, the hires level has not been this low since 2014, when the labor market was still rebuilding after the Great Recession,” she wrote.

She also attributed part of the problem to another force majeure: bad weather. Construction and accommodation/food services were the two industries where hiring fell most, and those are the ones most sensitive to weather events. February marked a brutal month across the country, with blizzards and blackouts. 

Skanda Amarnath, executive director of Employ America, an economic strategy firm, said bad weather and health care strikes explain part of the February drop, but not all of it. 

“We can probably attribute 50% to 60% to just kind of the one-offs,” he told Fortune. “But there’s something fundamental at play, too.” 

He pointed to reduced immigration as one factor quietly draining dynamism from the system: Less population growth means less churn, fewer people switching jobs, and fewer new hires.

Long flagged a more immediate warning sign: Hospitality and construction are typically where displaced workers land first, not the places that should be very sensitive to macroeconomic headwinds. 

“Most people, if they lose a job, think, ‘Okay, I could at least be a bartender or work at a restaurant,’” she said. “And clearly there was a deceleration in that area.”

How the war will impact jobs in America

The JOLTS (Job Openings and Labor Turnover Survey) data is from February, before the U.S.-Israeli campaign against Iran upended global energy markets. With Brent crude hovering above $115 and the Strait of Hormuz effectively closed, the question is whether the labor market’s low-hire, low-fire equilibrium can survive an energy shock. Bachaud warned surging gas prices would hit transportation, manufacturing, retail, and consumer spending—“further pulling back hiring activity in the March data.”

Long said the war could be the final straw on the camel’s back for the labor market. 

“It is not inconceivable that companies go from no hiring to starting to fire in order to make their budgets work,” she said, adding the April jobs report, due in May, “could really be a first big warning sign.”

For the Fed, the report deepens the potential stagflation bind. Amarnath noted inflation has been running a full percentage point above the central bank’s core target and trending in the wrong direction, even before the war. 

“The Fed’s got to be on guard for risks that their policy is not actually tight enough,” he said.

The March jobs report, due Friday, will offer the next read on the labor market. Both economists cautioned against drawing too direct a line from JOLTS to payrolls, but the broader picture is getting harder to wave away. Long said if Friday delivers another weak number, “it’s looking more like some early demand issues are back in the picture. And that’s really nerve-racking if you’re going to layer the war in Iran on top of that.”