The U.S. labor market exhibited signs of cooling in July 2025, with private employers adding 104,000 jobs, according to the ADP National Employment Report. This figure surpassed economists' expectations of a 75,000 increase. However, the overall labor market continues to show signs of slowing amid economic uncertainties, particularly due to import tariffs. Consumer sentiment reflects this trend, with more people viewing jobs as difficult to find. Unemployment claims remain elevated. The upcoming Bureau of Labor Statistics (BLS) report is expected to show an increase in nonfarm payrolls and a slight rise in the unemployment rate. Meanwhile, the Federal Reserve is expected to keep interest rates steady following its latest policy meeting, despite previous rate cuts in 2024 and pressure from President Donald Trump to reduce borrowing costs further.
In June 2025, U.S. job openings fell to 7.4 million, down from 7.7 million in May, signaling a continued cooling in the job market. Layoffs remained stable, but hiring and the number of people voluntarily quitting jobs—an indicator of job confidence—both declined. Hiring also dropped compared to May. The job market's slowdown is attributed to effects from past interest rate hikes by the Federal Reserve and economic uncertainty stemming from President Donald Trump's trade policies. Upcoming July data is expected to show a slight uptick in unemployment and a decrease in job gains from the previous month. Despite seemingly solid June numbers, private sector job growth was only 74,000—the lowest since October—while education job gains by government entities might be seasonally distorted.
So far in 2025, job creation has averaged 130,000 per month, a decline from 168,000 in 2024 and a much higher average of 400,000 between 2021–2023, during the post-pandemic recovery. While hiring slows, layoffs remain below pre-pandemic levels, suggesting cautious but stable employer behavior.
Employers are less likely to hire, but they're also not letting workers go either. Layoffs remain below pre-pandemic levels.