Hassett: jobs number little bit of a disappointment right now

Hassett: jobs number little bit of a disappointment right now

The U.S. economy received a significant jolt in early September as the monthly Job Openings and Labor Turnover Summary (JOLTS) report revealed that unemployment outpaced the number of available job openings for the first time since the pandemic era. This development, which comes amidst ongoing tariff uncertainty and inflation concerns, has raised alarms about potential labor market instability.

The July JOLTS report, released by the Bureau of Labor and Statistics (BLS), showed 7.18 million job openings, marking a 10-month low and a notable decrease from June's 7.36 million openings [1]. Simultaneously, the number of unemployed Americans stood at 7.2 million, slightly exceeding the available jobs for the first time since April 2021 [2]. This imbalance has not been seen since the pandemic, signaling a potential turning point for the labor market.

Economists have expressed concern over the implications of this data. Nancy Vanden Houten of Oxford Economics noted that the report indicated further signs of softening labor market conditions [3]. Meanwhile, Navy Federal Credit Union chief economist Heather Long underscored that the numbers underscore a frozen job market [4].

The health care and social assistance sector, traditionally a reliable job creation engine, saw a decrease of 181,000 openings in July [5]. Other sectors such as arts, entertainment and recreation, and mining and logging also experienced significant job losses. The job openings rate slipped to 4.3% from 4.4% in June, further indicating a slowing job market [6].

The ratio of jobs to unemployed individuals has fallen from a high of over 2:1 three years ago to 0.99 in July, highlighting the tightening labor market [7]. Many economists attribute this cooling to the lingering effects of Trump-era tariffs, which are believed to have put pressure on businesses to cut costs, including their workforce [8].

Recent data from Challenger, Gray & Christmas shows that U.S. employers cut nearly 86,000 jobs in August, marking a 39% increase from July and a 13% rise from the same period last year [9]. This trend is seen as a troubling sign for September, when seasonal hiring typically boosts employment numbers.

The Federal Reserve Chair, Jerome Powell, acknowledged a "curious kind of balance" in the current labor market, noting that both the supply of and demand for workers have slowed, which could lead to higher layoffs and rising unemployment [10]. Economists like Gregory Daco predict that the August jobs report, due out on Friday, will confirm a marked slowdown in labor market conditions, with a conservative estimate of only 40,000 new jobs created [11].

While the unemployment rate is expected to remain largely unchanged at 4.2%, there are concerns about the rising rate of Black unemployment. In July, the Black unemployment rate reached 7.2%, the highest level since October 2021, which is concerning because Black Americans often work in lower-income and temporary jobs that are typically the first to be cut during economic uncertainty [12].

The Federal Open Market Committee (FOMC) meeting in September is expected to consider a rate cut, with some predicting a 0.25% reduction, reflecting market expectations of economic turbulence [13]. Until a clearer picture emerges, individuals can take proactive steps to prepare for potential economic and financial turbulence, such as assessing their financial situation, paying off debt, building an emergency fund, and staying informed about their industry.

References:

[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] @GregDaco. "X post on Sept. 3, 2025"
[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"