Aug Jobs Report Shows a Slowing Market

📊 Aug 2025 Employment Situation Report (BLS)

·        Nonfarm payrolls increased a seasonally adjusted 22,000 for the month, way below economists’ estimates. 

·        Those getting jobs showed little change in terms of full-time or part-time hires. 

·        Healthcare (+30,600), Retail Trade (+20,800) led the way in terms of employment gains in August.  The Federal Government shed 15,000 jobs.

📈 July 2025 JOLTS Report

·       On the JOLTS side June figures showed job openings slipped to 7.2 million from 7.4 million in June while hires stayed stable at 5.3 million, signaling cooling demand for labor. 

I know I keep harping on this, but the U6 number keeps rising and that is an indication that it may become easier to recruit and place contract talent.  Here is the reasoning behind it:

What the U6 Measures

• U3 (headline unemployment): People actively seeking work.

• U6 (broader underemployment): Includes discouraged workers, part-time workers who want full-time, and marginally attached workers.

When U6 rises, it signals that more people are struggling to find stable employment or are underemployed.

Behavioral Impact on Job Seekers

• Less selective: Job seekers facing longer unemployment spells are more willing to accept temp/contract positions to maintain income.

• Bridge strategy: Many use temp jobs as a way to stay active in the labor market until a permanent role opens.

• Skill signaling: Contract work helps candidates avoid résumé gaps and keeps their skills fresh, which is more valuable when competition for full-time roles increases.

• Employer demand: Employers often increase use of temporary help during uncertainty rather than committing to permanent hires — which aligns with the supply of workers in higher U6 periods.

Evidence

• During the Great Recession (2008–2010), U6 spiked to ~17%. At the same time, the temporary help services industry grew significantly faster than overall employment once recovery began, because job seekers and employers both leaned toward flexible arrangements.  The job market has been soft for some time.

• Bureau of Labor Statistics (BLS) data often shows a strong correlation between temp staffing employment levels and broader unemployment measures — temp jobs expand early in recoveries, when U6 is still elevated.

• Smaller to mid-size staffing firms using Madison and my previous employer Damian Services, saw an increase in business well before the end of the Great Recession.

  
  

When the U6 rate rises, job seekers are indeed more inclined to accept temporary or contract jobs because they need income, want to avoid gaps, and face fewer permanent opportunities. Employers, in turn, offer more of these roles during economic uncertainty, reinforcing the trend.

For a deeper dive….

·       A more encompassing measure of unemployment (U6) that includes discouraged workers and those holding part-time jobs for economic reasons jumped by .2% to 8.1%.

·       Prime age labor force participation rate (ages 25-54) was up .3% 83.7%.

·       The overall labor force participation held was up by .1% to 62.3%.  This is 1.1% below the level of February 2020.

·       Average hourly earnings for all employees on private nonfarm payrolls rose by 10 cents, or 0.3 percent, to $36.53 in August. Over the past 12 months, average hourly earnings have increased by 3.7 percent. In August, average hourly earnings of private-sector production and nonsupervisory employees rose by 12 cents, or 0.4 percent, to $31.46.

·       In August, the average workweek for all employees on private nonfarm payrolls was 34.2 hours for the third month in a row. In manufacturing, the average workweek edged down to 40.0 hours, and overtime remained unchanged at 2.9 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls was unchanged at 33.7 hours in August.

·       APD reported that 54,000 jobs were added in August.

Source: ADP, BLS, CNBC, Fox News

https://www.bls.gov/news.release/archives/jolts_02092021.htm

https://www.bls.gov/news.release/empsit.nr0.htm

https://www.bls.gov/opub/mlr/2015/article/industry-employment-and-output-projections-to-2024.htm

JOB OPENINGS AND LABOR TURNOVER – JULY 2025

The number of job openings was little changed at 7.2 million in July, the U.S. Bureau of Labor Statistics reported today. Over the month, both hires and total separations were unchanged at 5.3 million. Within separations, both quits (3.2 million) and layoffs and discharges (1.8 million) were unchanged. 

This release includes estimates of the number and rate of job openings, hires, and separations for the total nonfarm sector, by industry, and by establishment size class. Job openings include all positions that are open on the last business day of the month. Hires and separations include all changes to the payroll

during the entire month.

Job Openings

The number and rate of job openings were little changed at 7.2 million and 4.3 percent, respectively, in July. The number of job openings decreased in health care and social assistance (-181,000); arts, entertainment, and recreation (-62,000); and mining and logging (-13,000).

Hires

In July, the number and rate of hires were unchanged at 5.3 million and 3.3 percent, respectively. The number of hires increased in other services (+86,000).

Separations

Total separations include quits, layoffs and discharges, and other separations. Quits are generally voluntary separations initiated by the employee. Therefore, the quits rate can serve as a measure of workers’ willingness or ability to leave jobs. Layoffs and discharges are involuntary separations initiated by the employer. Other separations include separations due to retirement, death, disability, and transfers to other locations of the same firm.

In July, the number and rate of total separations were unchanged at 5.3 million and 3.3 percent, respectively. Total separations were little changed in all industries.

In July, the number and rate of quits were unchanged at 3.2 million and 2.0 percent, respectively. The number of quits increased in professional and business services (+197,000). Quits decreased in construction (-80,000) and in transportation, warehousing, and utilities (-49,000).

The number and rate of layoffs and discharges in July were unchanged at 1.8 million and 1.1 percent, respectively. Layoffs and discharges decreased in professional and business services (-130,000) but increased in federal government (+5,000).

The number of other separations decreased to 272,000 (-63,000) in July.

Establishment Size Class

In July, establishments with 1 to 9 employees and establishments with 5,000 or more employees showed little or no change in job openings, hires, and separations rates.

June 2025 Revisions

The number of job openings for June was revised down by 80,000 to 7.4 million, the number of hires was revised up by 63,000 to 5.3 million, and the number of total separations was revised up by 281,000 to 5.3 million. Within separations, the number of quits was revised up by 67,000 to 3.2 million, and the number of layoffs and discharges was revised up by 192,000 to 1.8 million. (Monthly revisions result from additional reports received from businesses and government agencies since the last published estimates and from the recalculation of seasonal factors.)