The latest U.S. jobs report offers little reason for celebration despite the headline-friendly increase in job openings.
Employers posted 7.27 million openings in July, up from a revised 7.18 million in June. But the broader picture is far less encouraging: actual hiring fell to 5.1 million, down from 5.3 million, while workers quitting their jobs also declined — hardly a sign that employees feel confident about finding better opportunities.
The labor market, in other words, isn’t booming. It is stagnating without yet collapsing.
Employers appear reluctant to hire, but they are equally reluctant to conduct large-scale layoffs. That has produced what Navy Federal Credit Union economist Heather Long aptly described as a “low fire, low hire” environment. With unemployment still at a relatively low 4.1% and weekly unemployment claims remaining subdued, the labor market looks stable on the surface. Underneath, however, momentum is weak.
The year-to-date numbers make that weakness harder to dismiss. U.S. employers have added an average of just 61,000 jobs per month, a historically poor pace. Even if that is an improvement over 2025’s exceptionally weak job growth, it is still nowhere close to what would be expected from a genuinely healthy expansion.
Higher borrowing costs, tariff uncertainty and rising energy prices are adding to the pressure. Households are already dealing with elevated costs, while businesses face little incentive to expand payrolls aggressively.
The real story, then, is not that the American labor market is “sturdy.” It is that it remains remarkably resistant to deterioration despite losing momentum.
That distinction matters.
A labor market can remain technically healthy while becoming increasingly fragile. Fewer layoffs may prevent unemployment from surging, but fewer hires mean fewer opportunities for workers entering the market or trying to move into better jobs. Falling quits can likewise indicate that employees are becoming more cautious rather than more satisfied.
Friday’s August employment report will provide a much clearer test. Forecasters expect only 65,000 new jobs and an unemployment rate of 4.2%. If those numbers materialize, the July JOLTS report will look less like evidence of resilience and more like another warning that the U.S. labor market is slowly losing altitude.
July JOLTS: A discouraging report on hiring and momentum
• Openings: 7.27M, +1.24% MoM & % +2.57% YoY
• Hires: 5.05M, -5.21% MoM & -3.27% YoY
If you were looking for excitement in this morning’s JOLTS report, you will be disappointed. And you also need to get out more.
Total job openings in July rose slightly month-over-month and slightly more vs July 2025. June openings were revised down by 177K to 7.18M, which is the only reason for the month-over-month improvement.
Hires fell month-over-month, despite the -16K downward revision for hires in June. The hiring environment continues to be incredibly challenging for many workers. The hiring rate fell from 3.4% to 3.2%, the lowest since February. Job openings, no matter the level, are not worthwhile if they aren’t translating into actual hiring.
Both quits and layoffs fell month-over-month by 5% and 7%, respectively. The weak hiring is reflected in these metrics as employees and employers hug each other tightly.
These numbers are well below long-term averages, but this reaction is entirely normal for a job market malaise like the one we find ourselves in.
Quits can be a sign of rising job-switcher confidence (there is little), while layoffs are obviously a sign of employers tightening their belts or attempting to find replacements. Despite the headlines, neither is happening at a high volume.
As I mentioned in May, reported openings don't always lead to new jobs. That is proving to be the case now. With quits and layoffs low and a relatively tight labor market (more on that Friday), there is not a large pool of workers for employers to hire immediately. Even if there were, it's not clear employers would be doing so.