The U.S. job market has been steadily losing momentum, and fresh federal data released Friday indicates it may have finally hit a major turning point.
“We’re in the eye of the hurricane now,” wrote Daniel Zhao, chief economist at Glassdoor, in a note.
“After months of warning signs, the July jobs report makes it clear — the slowdown isn’t on the way, it’s already here,” he added.
A Notable Weak Market
Employers added just 73,000 jobs in July, according to the Bureau of Labor Statistics falling short of expectations.
Laura Ullrich, director of economic research for North America at Indeed, noted that economists typically estimate the U.S. needs to add between 80,000 and 100,000 jobs each month to match population growth.
Graph taken from https://www.cnbc.com/2025/08/01/us-job-market-jobs-report-july-2025.html
She noted that July’s numbers indicate the job market is falling short of keeping up with population growth effectively signaling a contraction.
Economists pointed out an even bigger red flag: job growth in May and June turned out to be far weaker than first reported.
The Bureau of Labor Statistics made steep downward revisions, showing just 19,000 jobs gained in May (down from 144,000) and 14,000 in June (down from 147,000).
In total, that’s 258,000 fewer jobs than initially estimated.
Economists noted that while the BLS routinely updates monthly figures as more data comes in from businesses and government agencies, the latest revisions were unusually steep and the reason for such a large adjustment remains unclear.
“This really reflects a very soft job market,” Ullrich said. “It’s not catastrophic, but those are extremely weak numbers not what you’d see in a robust economy.”
The figures may still be revised again in August, economists added.
Tariffs, other factors pose headwinds
Over the past three months, job growth has averaged just 35,000 when factoring in the revised figures a sharp drop from the 111,000 average in the first quarter of 2025.
Economists noted that most of the new positions have been concentrated in health care and social assistance, indicating the gains haven’t been widespread.
“This data paints a very different picture of the job market than we initially believed,” said Glassdoor’s Zhao in an interview.
“We had thought the labor market was holding up surprisingly well despite economic challenges like tariffs,” he added.
