Hiring managers are paralyzed by Trump’s tariffs and Powell’s rate hikes, JOLTS report reveals

The Labor Department reported Wednesday that job openings fell from 7.4 million in June and came in modestly below what economists had forecast. Healthcare and social assistance companies cut openings by 181,000 and retailers by 110,000.

The Job Openings and Labor Turnover Survey (JOLTS) showed that layoffs rose slightly. The number of Americans quitting their jobs — a sign of confidence in their ability to find better pay, opportunities or working conditions elsewhere — was unchanged from June at 3.2 million.

Jobs openings remain at healthy levels but have fallen steadily since peaking at a record 12.1 million in March 2022 as the U.S. economy roared back from COVID-19 lockdowns.

The U.S. job market has lost momentum this year, partly because of the lingering effects of 11 interest rate hikes by the inflation fighters at the Federal Reserve in 2022 and 2023 and partly because President Donald Trump’s trade wars have created uncertainty that is paralyzing managers making hiring decisions.

On Friday, the Labor Department will put out unemployment and hiring numbers for August. They are expected to show that businesses, government agencies and nonprofits added nearly 80,000 jobs last month, according to a survey of forecasters by the data firm FactSet. That would mark a modest improvement on the disappointing 73,000 they created in July.

Worse than the lackluster July hiring figures were Labor Department revisions that slashed a stunning 258,000 jobs off May and June payrolls. A furious Trump responded to the bad numbers by firing the head of the Bureau of Labor Statistics, the technocratic agency that compiles the statistics, and nominating a partisan idealogue to replace her.

So far this year, the economy has been generating 85,000 jobs a month, down from 168,000 last year and an average 400,000 a month during the hiring boom of 2021-2023.

In a time of uncertainty, employers are less likely to hire, but they’re not letting workers go either.

In a social media post Heather Long, chief economist at Navy Federal Credit Union, noted that jobs openings in July had come in below the number of U.S. unemployed (7.24 million) for the first time since April 2021. “This is yet another crack in the labor market that illustrates how much harder it is to get a new job right now than what we’ve seen in a long time,” she wrote.