The U.S. economy, already plagued by tariff uncertainty and inflation concerns, received a \u201cjolt\u201d of bad news just days after Labor Day. For the first time since the pandemic era, the monthly Job Openings and Labor Turnover Summary (JOLTS) showed that unemployment outpaced the number of available job openings. Here\u2019s why that spells trouble.<\/p>\n
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The stats, released by the Bureau of Labor and Statistics (BLS), revealed 7.18 million job openings in July \u2014 a 10 month low and a marked decrease from June\u2019s 7.36 million openings.<\/p>\n
Worse, the number of unemployed Americans stands at 7.2 million [1], putting the tally of those out of work slightly higher than available jobs, which hasn\u2019t occurred since April 2021 [2]. Further still, the Hill adds that the number of open jobs fell short of what experts predicted would be around 7.3 to 7.5 million.<\/p>\n
Oxford Economics economist Nancy Vanden Houten wrote, \u201cThe July JOLTS report showed further signs of softening labor market conditions\u201d while Navy Federal Credit Union chief economist Heather Long told CBS that the numbers underscore a frozen job market [3].<\/p>\n
\u201cThis is a turning point for the labor market,\u201d she added. \u201cIt’s yet another crack.\u201d<\/p>\n
Signs of economic turbulence to come?<\/p>\n
The number of unemployed workers outpacing that of available jobs could point to significant labor market instability ahead.<\/p>\n
To start, it\u2019s confirmation of a troubling three-month trend that saw \u201can average payroll gain from May to July of only 35,000,\u201d CBS reports. Add to that the fact that the job openings rate slipped to 4.3% from 4.4% in June [4], while openings in health care and social assistance \u2014 among the most reliable and consistent job creation sectors \u2014 decreased by 181,000 in July [5].<\/p>\n
\u201cThe main engine of job growth is seemingly stalling with job openings and hirings in healthcare at a post-pandemic low,\u201d Gregory Daco, EY-Parthenon chief economist, wrote in response to the report [6].<\/p>\n
Other notable sector losses include arts, entertainment and recreation (-62,000) and mining and logging (-13,000).<\/p>\n
Read more: Rich, young Americans are ditching stocks \u2014 here are the alternative assets they’re banking on instead<\/a><\/p>\n Axios notes that just three years ago, Americans revelled in a job market that offered a greater than 2:1 ratio of jobs to unemployed people. \u201cAs of July, that ratio has fallen to 0.99\u201d [7].<\/p>\n According to Reuters, many economists blame the Trump tariffs for cooling the labor market, with Wells Fargo senior economist Sarah House telling the outlet that her firm expects \u201cthe slower pace of consumer spending and cost pressures related to tariffs will keep the pressure on businesses to look for cost savings where they can, including their workforce” [8].<\/p>\n It\u2019s a prediction backed up by recent data from global outplacement and consulting firm Challenger, Gray & Christmas, which showed U.S. employers cut nearly 86,000 jobs in August \u2014 a 39% increase from July and up 13% from last August [9]. They report that it\u2019s the third-highest number of August job cuts in almost 20 years, behind only the height of the pandemic in 2020 and the Great Recession in 2008. They also see this trend as a \u201ctroubling sign\u201d for September, when seasonal hiring traditionally provides an uptick for employment numbers.<\/p>\n And in a recent speech at the Jackson Hole Symposium, Chair of the Federal Reserve Jerome Powell referenced \u201ca curious kind of balance\u201d in the current labor market due to \u201ca marked slowing in both the supply of and demand for workers.\u201d He noted that \u201cdownside risks to employment are rising,\u201d which can include \u201csharply higher layoffs and rising unemployment\u201d [10].<\/p>\n Things to keep in mind moving forward<\/p>\n The bigger picture of what this all means for the economy will come into focus with the August jobs report due Friday. Still, some analysts aren\u2019t bullish on the expected numbers.<\/p>\n \u201cAugust\u2019s employment report is likely to confirm \u2026 a marked slowdown in labor market conditions as business leaders \u2014 grappling with softer final demand, higher costs [and] rates [and] elevated uncertainty \u2014 continue to restrain hiring,\u201d Daco predicted [11].<\/p>\n CBS notes Daco\u2019s more conservative prediction of 40,000 new jobs created in August is half of the 80,000 that other economists anticipate. \u201cA figure around or exceeding that [80,000] level,\u201d they added, \u201cwould alleviate fears that the job market is cratering.\u201d They also point out that many experts predict the unemployment rate will remain largely unchanged at 4.2%.<\/p>\n Other experts, however, warn about bellwether stats in the jobs numbers, such as the steadily rising rate of Black unemployment.<\/p>\n CNN\u2019s Victor Blackwell spoke about the troubling trend of rising African-American unemployment in early August, noting July\u2019s 7.2% rate marked the highest level of Black unemployment since October 2021 [12]. It\u2019s concerning, he explained, because more Black Americans generally work lower income and temporary jobs, which \u201ctend to be the first jobs that employers cut when they\u2019re concerned about the economy \u2026 The reality is that Black Americans may feel it first, but all Americans could feel this next.\u201d<\/p>\n The anxiety over the economy and jobs numbers also led many to predict a Federal Reserve rate cut as part of the September Federal Open Market Committee (FOMC) meeting. That includes global investment firm BlackRock, which wrote, \u201cMarkets are increasingly convinced the Fed will cut rates by 0.25% on Sept. 17\u201d [13].<\/p>\n What you can do<\/p>\n Until a clearer picture emerges, you aren\u2019t helpless. There are steps you can take to help you weather any economic and financial turbulence ahead, including potential layoffs:<\/p>\n Take stock of your financial situation: See how any debt you may have stacks up against any savings or assets you own and determine how long you could continue paying essential expenses, in the event of job loss. A simple net worth calculator<\/a> may also help give you a general picture of where your finances stand.<\/p>\n Build a new budget: Find a budget<\/a> tracking system that works for you, and stick to it \u2014 from apps<\/a> to digital spreadsheets to old fashioned pen and paper, you\u2019ve got options. Work to minimize any non-essential spending so you can free up more of your budget for any debt repayment and savings.<\/p>\n Build or expand your emergency fund: If you don\u2019t have one yet, consider starting a simple emergency fund<\/a>, working to gradually save a minimum of three to six months worth of expenses. Consider using high-yield savings accounts<\/a> to help you put your money to work by passively earning interest, while still keeping it accessible.<\/p>\n Take the pulse of your industry: It\u2019s not a bad idea to pre-emptively see what the job market looks like in your field and what skills are being sought.<\/p>\n Consider upskilling: If you have the bandwidth (and the funds) consider investing in upskilling \u2014 even with microcredentials \u2014 to remain a competitive candidate in your field.<\/p>\n Nurture community: Whether in your personal or professional circle, building relationships in times of hardship<\/a> can be especially helpful. You may be a source of support to someone in need and may even one day benefit from such bonds yourself.<\/p>\n What to read next<\/p>\n Stay in the know. Join 200,000+ readers and get the best of Moneywise sent straight to your inbox every week for free. Subscribe now.<\/a><\/p>\n Article sources<\/p>\n At Moneywise, we consider it our responsibility to produce accurate and trustworthy content people can rely on to inform their financial decisions. We rely on vetted sources such as government data, financial records and expert interviews and highlight credible third-party reporting when appropriate.<\/p>\n We are committed to transparency and accountability, correcting errors openly and adhering to the best practices of the journalism industry. For more details, see our editorial ethics and guidelines<\/a>.<\/p>\n [1]. Bureau of Labor Statistics<\/a>. \u201cThe Employment Situation \u2014 July 2025\u201d<\/p>\n [2]. The Hill<\/a>. \u201cUnemployed workers outnumber available jobs for first time since 2021\u201d<\/p>\n [3]. CBS News<\/a>. \u201cThe government’s next jobs report lands Friday. Here’s what to look for\u201d<\/p>\n [4]. YCharts<\/a>. \u201cUS Job Openings Rate: Total Nonfarm\u201d<\/p>\n [5]. U.S. Bureau of Labor Statistics<\/a>. \u201cJob Openings and Labor Turnover Summary\u201d<\/p>\n [6]. @GregDaco<\/a>. \u201cX post on Sept. 3, 2025\u201d<\/p>\n [7]. Axios<\/a>. \u201cThere’s new evidence the job market is softening\u201d<\/p>\n [8]. Reuters<\/a>. \u201cUS labor market softening as job openings hit 10-month low, hiring remains tepid\u201d<\/p>\n [9]. Challenger, Gray & Christmas<\/a>. \u201cPharma and Finance Lead as August 2025 Job Cuts Rise 39% to 85,979\u201d<\/p>\n [10]. Yahoo!Finance<\/a>.\u201dAugust jobs report due out as Fed uncertainty looms: What to watch this week\u201d<\/p>\n [11]. @GregDaco<\/a>. \u201cX post on Sept. 3, 2025\u201d<\/p>\n [12]. @victorblackwell<\/a>. \u201cInstagram post on Aug. 3, 2025\u201d<\/p>\n