U.S. Job Market Shows Signs of Cooling

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An image illustrating a cooling U.S. job market with empty office spaces.

Washington, D.C., July 31, 2025

News Summary

The U.S. job market is experiencing a slowdown as job vacancies dropped to 7.4 million in June, down from 7.7 million in May. While layoffs remained stable, the rate of workers voluntarily quitting their jobs also decreased significantly. Hiring rates declined, highlighting a cautious environment in the labor sector influenced by recent interest rate hikes and trade uncertainties. Projections suggest a potential rise in the unemployment rate, indicating a softer labor market but with stability in job security for many workers.

Washington, D.C. – The U.S. job market is showing signs of cooling as employers posted approximately 7.4 million job vacancies in June, a decline from 7.7 million in May. This decrease in job openings aligns closely with forecasts made by industry experts, suggesting a shift in the labor market’s momentum.

Despite the drop in job postings, layoffs remained stable in June, and the rate of employees voluntarily quitting their jobs decreased to its lowest level since December. This indicates a growing sense of uncertainty among workers regarding their job prospects.

In June, hiring rates also saw a decline compared to the previous month. Economist Daniel Zhao noted that the job market can be described as “softer,” highlighting that the hiring and quitting rates are currently low, reflecting a market that is “not dire, not amazing, but more ‘meh’.”

The slowdown in the job market throughout 2023 has been influenced by various factors, including the Federal Reserve’s 11 interest rate hikes aimed at controlling inflation, as well as uncertainties stemming from trade policies. These factors have contributed to a loss of momentum in the labor sector.

Looking ahead, projections for July’s unemployment and hiring data, set to be released soon, indicate a potential increase in the unemployment rate from 4.1% in June to 4.2% in July. Economists surveyed anticipate the creation of approximately 115,000 jobs in July, which is a decrease from the 147,000 jobs added in June.

June also saw a modest increase of only 74,000 private payrolls, the lowest monthly increase since last October, influenced largely by job site disruptions caused by previous hurricanes. Meanwhile, state and local governments added around 64,000 education jobs in June, a figure that likely reflects seasonal adjustments at the conclusion of the school year.

The current economy is generating an average of 130,000 jobs per month this year, a significant reduction from 168,000 jobs in 2022 and drastically lower than the previous average of 400,000 jobs per month that characterized the recovery from COVID-19 lockdowns.

Despite the ongoing slowdown in hiring, the overall number of layoffs remains below pre-pandemic levels, suggesting that job security for many workers continues to be strong.

Key Job Market Metrics

  • Job vacancies
  • Laying Off Rate: Stable in June
  • Rate of Quitting Jobs: Lowest since December
  • Private Payroll Increase: 74,000 in June
  • State and Local Government Jobs Added: 64,000 in Education Jobs
  • Average Job Creation in 2023: 130,000 per month

Conclusion

The decline in job openings, combined with falling hiring numbers and a cautious atmosphere among workers, paints a portrait of a U.S. labor market that is cooling but still exhibits stability in terms of job security. As the economic landscape evolves amid interest rate adjustments and trade uncertainties, the future of the labor market remains an area to watch closely.

FAQ

What were the job vacancies in the U.S. for June 2023?

In June 2023, there were approximately 7.4 million job vacancies in the U.S.

How many jobs were added in June compared to May?

In June, only 74,000 private payroll jobs were added, which is a decrease compared to the 147,000 jobs added in May.

What does the decrease in job vacancies indicate about the job market?

The decrease in job vacancies suggests a cooling labor market, where hiring and quitting rates are low, and workers may be feeling less confident about job opportunities.

What can we expect for July’s unemployment rate?

The unemployment rate is projected to rise from 4.1% in June to 4.2% in July.

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Additional Resources

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