Employment Services NAICS 5613

Oct 13, 2025 - Economists Expect Cool Labor Market to Continue

• Economists surveyed by The Wall Street Journal expect the US labor market to keep cooling as economic growth slows. They forecast employers will add roughly 49,000 jobs per month over the four quarters, down from a previous estimate of 74,000, reflecting weaker demand for new hires after years of strong expansion. The unemployment rate is projected to edge up modestly as businesses hold off on hiring rather than resorting to large-scale layoffs. At the same time, labor productivity has improved, with output per hour rising about 3.5%, allowing companies to sustain growth with smaller workforces. Many economists see this productivity rebound (partly linked to technological and AI-driven efficiencies) as a key factor cushioning the economy against a sharper slowdown. The survey suggests that future growth will rely more on efficiency gains than job creation, signaling a gradual rebalancing in the post-pandemic labor market.
• Healthcare industry hiring is propping up the weakening US job market and accounting for about 86% of all monthly job additions, according to the US Labor Department. Of the economy’s 74,000 average new jobs a month in 2005 (down from last year’s 130,000 per month gain), about 64,000 of them are in the healthcare and social assistance sectors, essentially propping up virtually all US job gains. The US economy has 23.5 million health services jobs, compared to 12.7 million in manufacturing and 16.6 million in retail. Healthcare job growth is historically recession-proof given the cost is not typically an optional expense, especially among an aging US population. The more than $900 billion in Medicare cuts in Trump’s 2025 reconciliation bill is of major concern for the industry going forward and could lead to job losses.

• There are more Americans unemployed than there are job openings for the first time since the pandemic, according to the US Bureau of Labor Statistics. There were 7.1 million job openings in the US in the month of July and 7.2 million unemployed workers. Available private sector jobs continued a downward trend for the second straight month to 6.4 million. New hires for the month went up slightly to 5.3 million, while the number of people quitting their jobs was flat at 3.2 million. Experts say the numbers indicate that unemployed workers have stayed out of the job market longer than usual, and that the shift reflects a dip in job openings rather than more people being laid off. The country’s aging population and US immigration policies have also knocked labor force participation to its lowest level since 2022.
• Layoffs in the US job market spiked to their highest levels since the early days of the pandemic and have outpaced all job losses for the entirety of 2024 by 6%, according to outplacement company Challenger, Grey and Christmas. The firm reports about 806,000 layoffs so far in 2025, a 75% increase from the same time-period of the previous year. The federal government saw the biggest increase with 292,000 job cuts as a result of the work of the Department of Government Efficiency. Private sector job losses have been mostly driven by automation and AI integration in technology, accounting for 20,000 jobs. Other reasons cited by employers for the layoffs include economic uncertainty around tariffs, inflation, shifting demand, bankruptcies, and restructurings. Post-pandemic normalization from immediate overhiring after COVID are also contributing to employment decreases.