Now, here’s our labor market insights for August 2025, written by Matt Duffy (prepared without the use of AI):
Key Takeaways:
I’ve always loved a good quote. My wife jokes it’s because I’m not creative enough to come up with my own (she’s not wrong). In fact, my family can go an entire evening quoting just four movies: The Big Lebowski, The Godfather, Dumb and Dumber, and Pulp Fiction. That might say something about my sophomoric humor, but my favorite quotes actually come from E. F. Schumacher and Albert Einstein:
Schumacher said “Any intelligent fool can make things bigger, more complex, and more violent. It takes a touch of genius—and a lot of courage—to move in the opposite direction.”
And, just as importantly, Einstein said:
“Everything should be made as simple as possible, but not simpler.”
That last one especially sticks with me. Simple is almost always better. I spend way too much time digging into labor market updates, and I tend to overcomplicate them. So, if you ask me: “How’s the labor market?”, I’ll borrow from Einstein and keep it simple: it’s not very good.
Here’s why in three data points:
- The hiring rate
Hiring is stuck near its slowest pace since 2013 (it currently sits at 3.3%). That sluggishness makes it harder for new or returning workers to enter the job market and stalls upward mobility. To put it in perspective, employers hired an average of 29,000 workers per month from June through August, down sharply from 168,000 per month earlier in 2024. - Job openings per unemployed worker
For the first time in over four years, there are fewer job openings than unemployed workers. There’s nothing magical about the 1:1 threshold, but given how much attention it got during COVID, it highlights just how much softer the market is now.
- Job creation
The U.S. added just 22,000 jobs last month. On top of that, June was revised downward by 27,000 jobs, meaning we actually lost 13,000 jobs that month, the first monthly decline since December 2020.
I’ll stop there….fighting every urge to share more data and overcomplicate things. Instead, I’ll take Einstein’s advice and keep it simple. And if you disagree with me… well, “that’s just, like, your opinion, man.” Sorry, I couldn’t resist one Big Lebowski quote!
By the numbers:
- New Jobs – the U.S. added 22,000 new jobs in August
- The U.S. added an average of about 28,000 jobs over three months ending in July, which marked a major cooldown from the roughly 196,000 jobs added on average over the previous three-month period
- Unemployment increased slightly to 4.3%
- The rate is higher than the 50-year low of 3.4% seen in April 2023, but lower than the rates observed in previous years leading up to the Pandemic
- Job openings dropped to 7.2 million, down from 7.4 million the previous month
- The 11th consecutive month job openings were below 8 million
- Hires fell to 5.3 million, down from 5.4 million
- The hiring rate remains stuck at levels last seen in 2013, when the U.S. economy was still emerging from the Great Recession
- Layoffs increased to 1.8 million, up from 1.6 million the previous month
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- While we’re seeing a steady increase in layoff’s, the total layoff rate remains very low by historical standards
- Quits increased slightly to 3.2 million, up from 3.1 million the previous month
- Quits, which are seen as a measure of worker confidence in the ability to change jobs and find another one continues to remain very steady – and very low
- Total separations remained unchanged at 5.2 million
- The total separations rate remained mostly unchanged for seven months in a row at 3.3 percent
- Jobs per available worker fell to .99:1
- At its peak in 2022, the ratio was 2:1
- LFPR (labor force participation rate) increased slightly to 62.3%, up from 62.2% the previous month
- It hit a high of 67.3% in early 2000 and fell to 63.3% in the month before the onset of the pandemic
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