Why Experts Are Calling the ‘Anemic’ Labor Market the Worst Since 2010
The U.S. labor market in 2025 is being described by many experts as the weakest since 2010. A combination of slow job growth, revised employment figures, and rising economic uncertainty has raised alarms among economists and policymakers.
Slowed Job Growth
In August 2025, U.S. employers added only 22,000 jobs, far below economists’ expectations of roughly 75,000 new positions. This sluggish pace has persisted since at least April 2025, signaling a stagnation in new employment opportunities.
Rising Unemployment
The unemployment rate edged up to 4.3% in August 2025, marking a modest but persistent upward trend. The number of unemployed people reached 7.4 million, reflecting a labor market that is slowly losing momentum.
Sectoral Variations
Healthcare stood out as one of the few sectors showing significant job gains, with 46,800 positions added in August. However, industries like government, manufacturing, and wholesale trade either stalled or contracted. Federal government employment fell by 15,000 jobs in August and has lost 97,000 positions since January.
Job Market Revisions
The Bureau of Labor Statistics (BLS) recently issued a substantial downward revision for the previous year’s job growth, reducing estimates by 911,000 jobs between March 2024 and March 2025. This revision was much larger than expected, revealing that the labor market was weaker than initially believed.
Broader Labor Market Dynamics
The number of open positions dropped from 7.8 million in May to 7.2 million at the end of July 2025, signaling reduced demand for labor. Hiring and quitting rates have plateaued, suggesting a cautious approach from both employers and employees.
Hiring Trends
Instead of large-scale permanent hiring, companies are increasingly turning to contract, project-based, and interim staff. About 67% of employers are increasing their use of contract workers, allowing them to respond rapidly to shifting market conditions while limiting long-term commitments.
Worker Demographics
Labor force participation and the employment-to-population ratio have not improved, reflecting sustained hesitation among workers to re-enter or remain in the labor force. This trend underscores the lingering challenges in the job market.
Underlying Causes and Interpretations
Economic uncertainty, including the aftermath of recent pandemic disruptions, has made employers wary of expanding their teams or investing in new permanent hires. Many companies are hiring with greater precision, focusing only on essential roles that directly contribute to growth, revenue, or risk management.
Summary of Expert Views
Experts argue that the combination of sluggish job growth, downward revisions in employment data, rising unemployment, shrinking job openings, and greater reliance on temporary work has made the current labor market the weakest since the aftermath of the Great Recession.
While outright recession and mass layoffs have largely been avoided, the U.S. labor market heading into late 2025 shows underlying fragility. Both employers and workers are approaching the future with caution, signaling a challenging road ahead for the economy.
Economic Uncertainty and Its Impact
Concerns about ongoing economic headwinds, including the lingering effects of recent pandemic disruptions, have made employers increasingly cautious about expanding their teams or investing in new permanent hires. This uncertainty has led to a more conservative approach to hiring, with companies prioritizing stability over growth.
Cautious Expansion Strategies
Many businesses are adopting a more selective hiring approach, focusing only on essential roles that directly contribute to growth, revenue, or risk management. This precision in hiring reflects an effort to maintain operational efficiency without overextending resources in an unpredictable economic environment.
Structural Changes in the Labor Market
The recent downward revisions to job market data by the Bureau of Labor Statistics (BLS) highlight structural shifts in the economy. These adjustments aim to reflect the true state of the labor market, accounting for factors such as faster business closures and new business formation. Such dynamics suggest that the job market is undergoing significant transformation, with some industries expanding while others contract.
Expert Views on Labor Market Fragility
Experts emphasize that the current labor market’s fragility is not just about slow job growth or rising unemployment but also about the broader trends shaping the economy. The combination of sluggish job growth, downward revisions in employment data, shrinking job openings, and a growing reliance on temporary work paints a picture of a labor market that is more vulnerable than it has been in over a decade.
Conclusion
The U.S. labor market in 2025 is facing significant challenges, marked by slow job growth, rising unemployment, and economic uncertainty. With only 22,000 jobs added in August 2025, far below expectations, the market has shown persistent stagnation since April. The unemployment rate has climbed to 4.3%, and the number of unemployed individuals now stands at 7.4 million. While healthcare has shown resilience with 46,800 new jobs, other sectors like government and manufacturing are contracting, with federal employment dropping by 97,000 positions since January.
The BLS’s downward revision of job growth by 911,000 jobs highlights underlying labor market fragility. Job openings have decreased from 7.8 million to 7.2 million, and hiring trends now favor contract and temporary workers, with 67% of employers opting for non-permanent staff. This shift reflects employers’ cautious approach amid economic uncertainty, focusing on essential roles to maintain stability without overextending resources.
While avoiding recession, the labor market’s fragility is evident. Experts point to sluggish growth, downward data revisions, shrinking openings, and increased temporary hiring as indicators of the weakest market since 2010. Both employers and workers are adopting a cautious stance, signaling a challenging economic outlook for late 2025.
FAQ
Why is the U.S. labor market considered weak in 2025?
The U.S. labor market in 2025 is considered weak due to slow job growth, rising unemployment, and economic uncertainty. Job additions in August 2025 were significantly below expectations, and the unemployment rate has risen to 4.3%, with 7.4 million unemployed individuals.
What factors are contributing to the labor market’s weakness?
Key factors include slow job growth, rising unemployment, downward revisions in employment data, and a shift toward temporary workers. Economic uncertainty has led employers to adopt cautious hiring strategies, focusing on essential roles.
Which sectors are performing well in the current labor market?
Healthcare is one of the few sectors showing significant growth, with 46,800 jobs added in August 2025. However, sectors like government, manufacturing, and wholesale trade are contracting, with federal employment declining by 97,000 positions since January.
Why has hiring slowed down in the labor market?
Hiring has slowed due to economic uncertainty and cautious employer strategies. Companies are prioritizing stability over growth, focusing on essential roles and increasingly relying on contract and temporary workers to maintain flexibility.
How is economic uncertainty impacting the labor market?
Economic uncertainty has made employers cautious about expanding their teams or investing in permanent hires. This has led to a more conservative approach, with companies hiring with greater precision and relying on temporary staff to respond to market conditions.
Why are employers shifting toward temporary workers?
Employers are turning to contract, project-based, and interim staff to maintain flexibility and limit long-term commitments in an uncertain economic environment. About 67% of employers are increasing their use of contract workers to adapt to shifting market conditions.