The initial report from the U.S. Bureau of Labor Statistics (BLS) for June took economists by surprise, showing an increase of 147,000 jobs. Economists had predicted a slowdown in hiring due to trade policy uncertainties, high interest rates, immigration, and federal employee layoffs. However, as one economist quickly pointed out, despite the promising numbers, only 74,000 private sector jobs were added in June.
On August 1, 2025, a new BLS report showed little change in employment numbers in July and little change since April, much to the disappointment of President Donald Trump, who promptly fired the head of BLS, Erika McEntarfer, only hours after BLS published the report.
This report substantially revised previous figures based on two surveys conducted by the BLS. More specifically, the BLS reported that U.S. employers added 73,000 jobs in July, a much lower figure than expected. Furthermore, the BLS revised previously reported job gains in May and June downward by an abnormal amount. May's jobs figure decreased from 144,000 to 19,000, and June's jobs figure decreased from 147,000 to 14,000. Finally, unemployment also increased to 4.2%.
A SHRM labor economist, Andrea Medici, referred to the labor market as "significantly cooler than previously understood . . . which is concerning given the highly uncertain economic environment." Job creation in healthcare, leisure and hospitality, and government remained steady. However, fewer job listings, a hiring rate at a one-year low, and a quits rate below the five-year average, 2025 marks the weakest year for job creation since the 2007 – 2009 financial crisis, except for the 2020 pandemic year.
According to the August BLS report, healthcare added 55,000 jobs in July, which was higher than the average for the last year. Private education and health services added 79,000 jobs in July. Federal government employment continued to decrease by 12,000 in July, and a total of 84,000 since it peaked in January 2025. This figure does not include the tens of thousands of federal employees who are using paid leave or receiving ongoing severance pay.
Other sectors remained flat, and many lost jobs, including professional and business services, manufacturing, and government. Changes in workforce supply are likely exacerbating the situation, with immigrant workers declining and a large chunk of the U.S. population retiring. The labor force losses decreased for the third month in a row, which had not occurred since 2011. The drop in labor force totals 793,000 from April to July, which is reminiscent of the drop seen in the Great Recession in the late 2000s.
In addition to the slight uptick in the unemployment rate (4.1% to 4.2% over the past month), another unemployment figure based on a broader swath of data increased to 7.9%, the highest level since March. Meanwhile, the average number of weeks of unemployment rose to 24.1, a number not seen since April 2022. The number of workers unemployed for more than 27 weeks increased to 1.82 million, the highest figure since December 2011.
One bright spot to the report — at least for workers — is that average hourly earnings grew 3.9%, up from 3.7% in June. However, these figures keep inflation lower, which could further discourage the Federal Reserve from cutting interest rates.
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