The U.S. economy, already plagued by tariff uncertainty and inflation concerns, received a “jolt” 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’s why that spells trouble.
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The stats, released by the Bureau of Labor and Statistics (BLS), revealed 7.18 million job openings in July — a 10 month low and a marked decrease from June’s 7.36 million openings.
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’t 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.
Oxford Economics economist Nancy Vanden Houten wrote, “The July JOLTS report showed further signs of softening labor market conditions” while Navy Federal Credit Union chief economist Heather Long told CBS that the numbers underscore a frozen job market [3].
“This is a turning point for the labor market,” she added. “It’s yet another crack.”
Signs of economic turbulence to come?
The number of unemployed workers outpacing that of available jobs could point to significant labor market instability ahead.
To start, it’s confirmation of a troubling three-month trend that saw “an average payroll gain from May to July of only 35,000,” 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 — among the most reliable and consistent job creation sectors — decreased by 181,000 in July [5].
“The main engine of job growth is seemingly stalling with job openings and hirings in healthcare at a post-pandemic low,” Gregory Daco, EY-Parthenon chief economist, wrote in response to the report [6].
Other notable sector losses include arts, entertainment and recreation (-62,000) and mining and logging (-13,000).
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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. “As of July, that ratio has fallen to 0.99” [7].
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 “the 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].
It’s 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 — a 39% increase from July and up 13% from last August [9]. They report that it’s 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 “troubling sign” for September, when seasonal hiring traditionally provides an uptick for employment numbers.
And in a recent speech at the Jackson Hole Symposium, Chair of the Federal Reserve Jerome Powell referenced “a curious kind of balance” in the current labor market due to “a marked slowing in both the supply of and demand for workers.” He noted that “downside risks to employment are rising,” which can include “sharply higher layoffs and rising unemployment” [10].
Things to keep in mind moving forward
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’t bullish on the expected numbers.
“August’s employment report is likely to confirm … a marked slowdown in labor market conditions as business leaders — grappling with softer final demand, higher costs [and] rates [and] elevated uncertainty — continue to restrain hiring,” Daco predicted [11].
CBS notes Daco’s more conservative prediction of 40,000 new jobs created in August is half of the 80,000 that other economists anticipate. “A figure around or exceeding that [80,000] level,” they added, “would alleviate fears that the job market is cratering.” They also point out that many experts predict the unemployment rate will remain largely unchanged at 4.2%.
Other experts, however, warn about bellwether stats in the jobs numbers, such as the steadily rising rate of Black unemployment.
CNN’s Victor Blackwell spoke about the troubling trend of rising African-American unemployment in early August, noting July’s 7.2% rate marked the highest level of Black unemployment since October 2021 [12]. It’s concerning, he explained, because more Black Americans generally work lower income and temporary jobs, which “tend to be the first jobs that employers cut when they’re concerned about the economy … The reality is that Black Americans may feel it first, but all Americans could feel this next.”
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, “Markets are increasingly convinced the Fed will cut rates by 0.25% on Sept. 17” [13].
What you can do
Until a clearer picture emerges, you aren’t helpless. There are steps you can take to help you weather any economic and financial turbulence ahead, including potential layoffs:
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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 may also help give you a general picture of where your finances stand.
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Pay off as much debt as you can: Work to eliminate (or minimize) any debt — and especially high interest debt, like credit card debt — as fast as you can. Two popular methods for paying down debt are debt snowball and debt avalanche methods.
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Build a new budget: Find a budget tracking system that works for you, and stick to it — from apps to digital spreadsheets to old fashioned pen and paper, you’ve got options. Work to minimize any non-essential spending so you can free up more of your budget for any debt repayment and savings.
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Build or expand your emergency fund: If you don’t have one yet, consider starting a simple emergency fund, working to gradually save a minimum of three to six months worth of expenses. Consider using high-yield savings accounts to help you put your money to work by passively earning interest, while still keeping it accessible.
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Take the pulse of your industry: It’s not a bad idea to pre-emptively see what the job market looks like in your field and what skills are being sought.
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Consider upskilling: If you have the bandwidth (and the funds) consider investing in upskilling — even with microcredentials — to remain a competitive candidate in your field.
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Nurture community: Whether in your personal or professional circle, building relationships in times of hardship 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.
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Article sources
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[1]. Bureau of Labor Statistics. “The Employment Situation — July 2025”
[2]. The Hill. “Unemployed workers outnumber available jobs for first time since 2021”
[3]. CBS News. “The government’s next jobs report lands Friday. Here’s what to look for”
[4]. YCharts. “US Job Openings Rate: Total Nonfarm”
[5]. U.S. Bureau of Labor Statistics. “Job Openings and Labor Turnover Summary”
[6]. @GregDaco. “X post on Sept. 3, 2025”
[7]. Axios. “There’s new evidence the job market is softening”
[8]. Reuters. “US labor market softening as job openings hit 10-month low, hiring remains tepid”
[9]. Challenger, Gray & Christmas. “Pharma and Finance Lead as August 2025 Job Cuts Rise 39% to 85,979”
[10]. Yahoo!Finance.”August jobs report due out as Fed uncertainty looms: What to watch this week”
[11]. @GregDaco. “X post on Sept. 3, 2025”
[12]. @victorblackwell. “Instagram post on Aug. 3, 2025”
[13]. BlackRock Advisor Center. “Fed rate cuts and potential portfolio implications”
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.