The Low Fire Rate Paradox Explained

The Macro Memo with Fexingo: Daily Conversations on Inflation, GDP, and Federal Reserve Policy · Oct 25, 2026 · 10m · transcript

With jobless claims hitting lows not seen since the nineteen sixties and the unemployment rate ticking up to four point two percent, the US labor market is displaying a strange disconnect. Lucas and Luna unpack the low fire rate phenomenon, where employers are holding onto workers despite softening demand. We look at how this dynamic impacts wage growth, keeping average hourly earnings sticky, and why the Federal Reserve might be underestimating the inflationary pressure from retained staff. This is a deep dive into the mechanics of labor hoarding and what it means for interest rates heading…