U.S Jobs declines amid Job openings in the Labour Market. Image: State of The Planet] .
(The Post News) -U.S. job openings declined to 7.2 million in July, new data released Wednesday by the Labor Department indicate. The drop from 7.4 million in June last year is the first time job openings dropped below the level of unemployed Americans since April 2021.
The decline marks a major turning point in the U.S. labor market, which cooled steadily in the past year. Economists predicted job postings to come in around 7.37 million, so the actual number was significantly weaker than predictions. “This is another crack in the labor market,” said Navy Federal Credit Union Chief Economist Heather Long. “It shows how much harder it is to get a new job today.”
Healthcare and Retail Drive Decline in Job Openings
Several industries drove the July decrease: Healthcare and social assistance took away 181,000 jobs, the biggest decrease among any industry. Retail trade came in second, taking away 110,000 jobs. Leisure and hospitality, which had been a job source in previous months, also posted slight decreases.
On the other hand, employment postings rose modestly in industry sectors like wholesale trade, construction, and the federal government. Federal agencies, such as those dealing with immigration enforcement, are filling jobs to replace fast-tracked layoffs during the Trump administration.
However, for most industries, hiring leveled out, but layoffs crept slightly upward. The number of Americans who were voluntarily leaving their jobs, a key measure of worker sentiment, was unchanged at 3.2 million in July. Quits peaked during the “Great Resignation” of 2021 and 2022 but have slowed markedly.
Low turnover can stall wage growth and limit new job opportunities. “A dynamic labor market helps drive up wages and support innovation,” said Allison Shrivastava, an economist at job site Indeed. “Right now, we’re seeing the opposite.”
U.S. Post-COVID Boom Fades Amid Higher Interest Rates
Job listings have now declined consistently from a record level of 12.1 million in March 2022, when the economy recovered from pandemic lockdowns. The pullback is due to two main drivers:.Federal Reserve interest rate increases in 2022 and 2023, aimed at curbing inflation, have increased the cost of borrowing for companies. U.S. President Donald Trump’s constant trade wars have added uncertainty, deterring companies from growing or hiring.
To date in 2025, the U.S. economy has created an average of 85,000 new jobs per month, down dramatically from 168,000 per month in 2024, and below the 400,000 per month average when the economy was booming in 2021-2023. The cool job market has ignited political tensions in Washington. President Trump reacted angrily when the Labor Department lowered its May and June employment totals by a combined 258,000 jobs. He dismissed the director of the Bureau of Labor Statistics and nominated a politically linked replacement.
The move was roundly condemned by economists and statisticians, who warn that undermining independent agencies distorts public confidence in economic statistics. The July JOLTS report starts off an abbreviated but critical week for labor market data, topped by Friday’s jobs report for August. FactSet-surveyed economists predicted U.S. employers hired 80,000 workers in August, better than the weak 73,000 of July.
The unemployment rate in the U.S. is projected to hold steady at 4.2%, but analysts say the key will be whether August figures are later revised, like those in previous months. “We’ll be watching the revisions closely,” said Dan North, senior economist for Allianz Trade. “The last two were pretty shocking.”
For the first time in over four years, there are just more people looking for jobs than there are jobs available. In July: Jobs advertised were 7.18 million, with unemployed persons standing at 7.24 million. This change is one of reversal and reflects one of reversal to a fundamental shift in the job market and an additional burden on job seekers.
Earlier years had the labor market shift strongly in the workers’ direction, with workers being able to bargain for increased pay and benefits. That equation is now turning in favor of employers. While job listings remain relatively healthy on a historical basis, the chronic softening of demand, with all the angst associated with politics and uncertainty, marks a tipping point for America’s workforce.
Fewer jobs are available. More out-of-work people. Level hiring. And less job-switching activity. The U.S.’ employment market is not crashing, but it’s no longer rising.
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