The booming labor market and low unemployment that enabled millions of workers to boost their wages and reinvent their careers, are starting to ebb, with some economists worrying if mass layoffs are in the offing, The Wall Street Journal reports.

The unemployment rate rose to 4.1% in June, the first time it has crossed above 4% since 2021. That’s up from the historically low 3.4% unemployment in 2023, a 54-year low not seen since 1969.

Workers already seem to sense change is in the air, having stopped quitting jobs at a frenzied pace. College grads are now having a hard time breaking into the market at all, and some job seekers report competing with 3,000 applicants. It’s no wonder, since the number of open positions for every unemployed person is down from 2 openings in 2022 to where it was before the pandemic: 1.2 openings.

The job market is just readjusting back to norms, say some economists. Others think conditions could be worsening.

Jobs were plentiful when the U.S. economy roared back to life after the pandemic shut everything down, with some economists branding this a “V” shaped recovery.

“Frankly, I’m not sure that labor market was ever sustainable,” says Nick Bunker, an economist with job search website Indeed. “It was built on the back of a huge COVID shock. It was amazing to see, but it was never going to stick around long.”

Claudia Sahm, chief economist at investment firm New Century Advisors, adds, “The labor market cooled back to a strong place. This is a good labor market, but it’s not clear if the cooling is done.”

As the COVID pandemic, which officially began in the United States in January 2020, began to ease between 2021 and 2023, the U.S. faced a nationwide labor shortage. Wages soared, peaking at a year-over-year growth rate of 5.9% in March 2022, federal data shows.

In this tight labor market, unions seized the moment and successfully negotiated big pay raises and better benefits, from UPS drivers, to the United Auto Workers in Detroit, to writers and actors in Hollywood.

While wage growth tamped back down to 3.9% last month, it’s still higher than the 3% in the months before the pandemic.

Certainly, while the last 42 consecutive months of employment growth has been remarkable, U.S. job growth slowed to 206,000 in June — concentrated only in the few sectors of healthcare, construction and government.

Human resources and executive search professionals say the competition for jobs is already intense — and, if layoffs increase, finding a job could become even tougher.

“As soon as a position is open on LinkedIn, within an hour over 100 people have applied,” says Carren Jones, an HR executive in the Philadelphia area who herself has been looking for a job for more than a year. Jones says her savings is dwindling and networking has fallen through.

Ironically, she says, “One HR professional who was trying to help me land my next opportunity, wound up getting laid off.”

Career coach Ed Samuel of Kennett Square, Pa., has seen downward pressure on compensation. “You see jobs posted on LinkedIn in the $175,000 to $225,000 range, with job descriptions that are almost identical to a position that would have been $275,000 a few years ago,” Samuel says.

As economist Sahm sums up the labor market, “It’s a good time to have a job. It’s a harder time to find one.”