According to the recent reports by the U.S. Bureau of Labor Statistics (BLS), the U.S. labor market cooled down more than expected in July, adding just 73,000 jobs, well below the 12-month average of 183,000. May and June job gains were revised down by a combined 258,000, with May falling from 144,000 to 19,000 and June from 147,000 to 14,000. Those sharp corrections pull the three-month average payroll gain down to just 35,000 per month, the slowest pace since the onset of the pandemic.

In July, job growth was concentrated in health care (+55,000) and social assistance (+18,000).  Federal government employment continued to decline, losing 12,000 jobs, reflecting a continued downward trend in public sector employment. This marks a drop of approximately 84,000 jobs since its peak earlier this year, signaling sustained contraction in the public sector’s hiring activity. Most other major industries saw little or no change.

Average hourly earnings for private nonfarm employees rose $0.12 in July to $36.44, up 3.9% from a year earlier.

Additionally, LinkedIn’s July 2025 Workforce Report shows national hiring fell 8.4% from May to June and is down 12% compared to June 2024, leaving overall activity 9% below January levels and 25% below June 2019 (pre-pandemic). The most significant slowdowns were observed in Financial Services (-17.8%), Government Administration (-17.7%), Technology, Information, and Media (-12.4%), and Professional Services (-11.7%).

The BLS revisions have sparked debate among economists and policymakers, with differing views on how best to interpret current labor market conditions. From our perspective, these downward adjustments reflect what we are consistently hearing “on the ground” from both our employees and broad base of candidates: hiring activity is slowing, government agencies are facing tighter budgets, and organizations are moving cautiously in filling positions. The disconnect between earlier reported figures and current realities emphasizes the importance of looking beyond headline numbers to understand the true state of the labor market. Overall, these data point to an economy losing momentum and a job market entering a slower, uncertain phase, warranting continued attention for signs the slowdown could deepen.

In this evolving environment, Stage 4 Solutions remains a trusted partner to our clients, delivering the talent and expertise needed to fill critical gaps and ensure continued success.