Layoffs Are Last Resort Now Looming for More US Companies

The Federal Reserve’s ability to avert a downturn rests in part on just how long a post-pandemic irregularity can continue: labor hoarding.

Even with interest rates at the highest level in more than two decades and signs of a cooling economy, businesses scarred by pandemic-era worker shortages have largely avoided layoffs. Instead, they’ve pulled back hiring, trimmed job openings and reduced hours.

But recent data is stoking fears employers may soon near the end of their rope — and pick up the pace of job cuts.

The labor market is “at the tail end of this sort of ...