July 2025 Job Openings Fall to 7.18 Million | Post-Pandemic Labor Market Cooling Trends & JOLTS Data Analysis
July 2025 Job Openings Fall to 7.18 Million | Post-Pandemic Labor Market Cooling Trends & JOLTS Data Analysis
Key Takeaways
- Job openings dropped to 7.18 million in July 2025, the lowest in nearly a year and below economist expectations .
- For the first time since April 2021, there are more unemployed people (7.24 million) than job openings, signaling a major shift in labor dynamics .
- The Federal Reserve is widely expected to cut interest rates in response to cooling labor market conditions .
- Healthcare and retail sectors saw the steepest declines in openings, while manufacturing and construction added positions .
- Negative revisions to previous months' data suggest the labor market weakness is more pronounced than initially thought .
1. The Numbers Don't Lie: Job Openings Fell Hard in July
So the latest JOLTS data dropped yesterday and it's pretty concerning not gonna lie. Job openings fell to 7.18 million in July, down from a revised 7.36 million in June . Thats the lowest level we've seen in basically 10 months, and it missed economist expectations pretty significantly - they were forecasting around 7.38 million .
I've been tracking this data for years now, and what really stood out to me was the downward revision to June's numbers. Originally reported at 7.43 million, then revised down to 7.36 million . This pattern of negative revisions has been happening alot lately, and it tells me the labor market is weakening faster than the headline numbers suggest.
The job openings rate slipped to 4.3% in July from 4.4% in June . While this is still above pre-pandemic levels (which typically hovered around 4%), it's a far cry from the insane 7.6% peak we saw in November 2021. We're definitely moving back toward historical norms, but the pace of this decline is what has me worried.
Table: Job Openings Trend (July 2025)
2. Why This Isn't Normal Cooling - It's Something Different
Here's the thing that really caught my attention: for the first time since April 2021, we have more unemployed people (7.24 million) than job openings (7.18 million) . That ratio now stands at 0.99, meaning there's basically one job opening for each unemployed person . Compare that to spring 2022 when we had over 2 openings for every unemployed person!
This isn't just normal "cooling" - it's a fundamental shift in labor market dynamics. I was talking to a recruiter friend yesterday who said companies are getting way more selective. They're not necessarily firing people, but they're definitely slowing there hiring way down. It's like the market has frozen up .
What's really interesting is that this isn't following typical patterns. Usually when openings decline, we see layoffs spike. But right now, layoffs are still relatively low at 1.8 million . Companies seem to be holding onto existing workers but not adding new ones. It's this weird limbo state where nobody's quitting, nobody's getting fired, but nobody's getting hired either.
The labor supply crunch from immigration policies is definitely playing a role here . Without enough workers, some companies just gave up on trying to fill positions, which contributes to the drop in openings. It's a complex situation that can't be explained by simple economic models.
3. Which Industries Got Hit Hardest?
The sector breakdown tells a really interesting story. Healthcare and social assistance got absolutely hammered, losing 181,000 openings . That's huge considering healthcare had been one of the most reliable sectors throughout the pandemic. Arts, entertainment and recreation dropped 62,000 openings, and retail lost 110,000 .
Meanwhile, construction added 64,000 openings and manufacturing added 41,000 . This divergence suggests we're seeing a rebalancing from services back toward goods production. Some of this might be companies reshoring or building more resilient supply chains amid all the trade uncertainty.
From what I'm hearing in my professional network, the manufacturing increases are concentrated in durable goods (machinery, electronics) and nondurable goods (food, chemicals) . Construction's increase is surprising given the housing market slowdown, but might reflect infrastructure projects or commercial construction.
Table: Sector Changes in Job Openings (July 2025)
4. The Revisions Problem - Why Previous Months Were Worse Than We Thought
This is something that hasn't gotten enough attention: the negative revisions to previous months data . June's job openings were revised down by 80,000, and the number of people who lost their jobs that month was revised up by a whopping 192,000 .
This follows a pattern we saw in the August jobs report, which revised May and June payrolls down by 258,000 jobs combined . There seems to be a systematic pattern where employers who submit survey responses late are reporting weaker numbers, which only show up in revisions .
As someone whose been analyzing this data for a while, I can tell you that revision patterns often contain valuable signals. When we see consistent downward revisions across multiple reports, it usually indicates the underlying trend is weaker than the initial data suggests. This pattern reminds me of what we saw heading into the 2008 recession, though obviously the magnitude is different.
The fact that both the establishment survey (which gives us payroll numbers) and the JOLTS survey are showing these negative revision patterns really makes me think the labor market deterioration began earlier and is more pronounced than we initially realized.
5. What This Means for Fed Policy and Interest Rates
Alright, let's talk about the Fed implications because this is huge. Fed Chair Jerome Powell already signaled at Jackson Hole last month that they're concerned about labor market risks . The market is now pricing in a 92% probability of a rate cut at the September 16-17 meeting .
The Fed's been in a tough spot with inflation still above target, but these labor market numbers are hard to ignore. We've got clear evidence that the job market is deteriorating, with openings down, unemployment ticking up, and revisions pointing to even weaker conditions .
What I think alot of people miss is that the Fed isn't just looking at the unemployment rate (which is still low at 4.2%). They're looking at this broader deterioration in labor market conditions. When job openings fall below unemployed workers, that tells them the labor market isn't tight anymore .
The Fed's benchmark rate has been sitting at 4.25%-4.50% since December . That's pretty restrictive, and with the labor market clearly cooling, they've got room to cut without risking an inflation surge. I'd be pretty surprised if they don't cut at least 25 basis points this month.
6. How This Affects Your Job Search Right Now
So what does this mean for actual job seekers? Well, it's definitely getting tougher out there. Heather Long, chief economist at Navy Federal Credit Union, put it perfectly: "This is yet another crack in the labor market that illustrates how much harder it is to get a new job right now than what we've seen in a long time" .
From what I'm seeing in the data and hearing from recruiters, companies are being much more selective. The days of easy job-hopping for 20% raises are basically over. The quits rate held steady at 2.0% , which means people are staying put in their current jobs rather than confidentely jumping to new opportunities.
If you're looking for work right now, focus on sectors that are still adding openings - construction, manufacturing, wholesale trade . Avoid sectors that are cutting back hard like healthcare (which is surprising) and retail. Also consider looking at government jobs - federal government hiring is up, especially in areas like immigration enforcement .
The regional patterns are interesting too - the South saw the largest drop in openings (161,000), while the West actually added 113,000 openings . So geographic flexibility could really help right now.
7. Historical Context - How This Compares to Previous Downturns
Let's put this in historical perspective because context matters. Job openings peaked at a record 12.1 million in March 2022 . We're now down to 7.18 million - that's a 40% decline in just over three years.
The last time unemployed workers outnumbered job openings was April 2021 , when we were still in the pandemic recovery phase. Before that, you have to go back to the aftermath of the 2008 financial crisis to see similar patterns.
What's different this time is that we're not seeing mass layoffs - at least not yet. Layoffs edged up slightly to 1.808 million in July , but that's not catastrophic. Companies seem to be hoarding labor rather than conducting mass layoffs, probably because they remember how hard it was to find workers during the pandemic.
The average monthly job gain this year has been just 85,000, down from 168,000 last year and a far cry from the 400,000 monthly average during the 2021-2023 hiring boom . That's a dramatic slowdown, but not quite recession territory yet.
8. What to Watch in Friday's Jobs Report
All eyes are now on Friday's August employment report. Economists are expecting nonfarm payrolls to increase by about 75,000-80,000 , which would be a slight improvement from July's disappointing 73,000 but still pretty weak.
The unemployment rate is forecast to edge up to 4.3% from 4.2% . But honestly, the headline numbers might be less important than the revisions. If we see another round of negative revisions to previous months, that would confirm the weakening trend is established and accelerating .
I'll also be watching wage growth closely. If wage growth remains strong even as the labor market cools, that could complicate the Fed's decision-making. But if wage growth moderates, that gives the Fed more room to cut rates aggressively.
The other thing to watch is the labor force participation rate. With immigration policies tightening , we might see further declines in labor supply, which could paradoxically push unemployment down even as the job market weakens.
At the end of the day, this JOLTS report adds to the growing evidence that the labor market is in a definite cooling trend. It's not catastrophic yet, but the direction is clear - and Fed policy is likely to respond accordingly.
Frequently Asked Questions
How many job openings were there in July 2025?
There was 7.18 million job openings in July 2025, according to the JOLTS report released September 3rd . That's down from a revised 7.36 million in June and below economist expectations of about 7.38 million.
What does it mean that job openings fell below unemployed workers?
This means that for the first time since April 2021, there are more people looking for work (7.24 million unemployed) than there are jobs available (7.18 million openings) . This suggest the labor market has shifted from being worker-friendly to employer-friendly.
Which sectors lost the most job openings?
Healthcare and social assistance got hit hardest, losing 181,000 openings . Retail trade lost 110,000 openings, and arts/entertainment/recreation lost 62,000. Construction and manufacturing actually added openings, gaining 64,000 and 41,000 respectively .
How does this affect Federal Reserve interest rate decisions?
The weakening labor market greatly increases the likelihood that the Fed will cut rates at their September 16-17 meeting . The market is pricing in a 92% probability of a rate cut. Jerome Powell had already signaled concern about labor market risks at Jackson Hole last month .
Is the US economy heading for a recession?
The JOLTS data alone doesn't indicate a recession, but it does suggest the labor market is cooling significantly. The fact that we're seeing consistent downward revisions to previous months data is particularly concerning . Most economist think we're experiencing a slowdown but not necessarily a full-blown recession yet.