US Unemployment Has Now Surpassed Number Of Available Jobs - What's Happening To America?

America's once-robust job market has hit a sobering milestone: for the first time since April 2021, the number of unemployed workers overtook job openings, signalling economic trouble ahead. In July 2025, 7.2 million jobseekers vied for 7.18 million vacancies, a stark shift for a labour market that once brimmed with opportunity. This turning point, driven by policy uncertainty and cooling demand, raises fears of a looming recession.

Job Openings Plummet, Unemployment Rises in 2025

The US labour market is cooling rapidly. According to the Bureau of Labour Statistics (BLS), job openings fell to 7.2 million in July 2025, down from 7.4 million in June, marking a 10-month low. Meanwhile, the unemployment rate held steady at 4.2%, with 7.2 million people jobless, unchanged from June.

This parity between the number of unemployed workers and available jobs hasn't been seen since the COVID-19 recovery period. 'This is yet another crack in the labour market that illustrates how much harder it is to get a new job right now than what we've seen in a long time,' warned Heather Long, chief economist at Navy Federal Credit Union, in a social media post. Economists attribute this to President Trump's sweeping import tariffs, which have stifled hiring demand.

Economic Policies Fuel £77B Trade Disruptions

Trade policies are squeezing employers and Trump's volatile tariff rates have disrupted £77 billion ($118 billion) in trade, leading to hiring freezes across industries like manufacturing, which lost 11,000 jobs in July. 'Tariffs and uncertainty are paralysing employers,' said Gregory Daco, chief economist at EY-Parthenon, highlighting how policy shifts curb business growth.

Healthcare and social assistance sectors cut 181,000 openings, while retail slashed 110,000, reflecting cautious corporate strategies. Layoffs, particularly in construction, rose slightly to 1.8 million, adding pressure to an already strained market.

The labour force participation rate dropped to 62.2%, the lowest since November 2022, partly due to tightened immigration policies reducing the workforce.

Wage Growth Slows, Impacting £1.2T Consumer Spending

Wages are losing ground against inflation. Average hourly earnings rose 3.9% to £23.74 ($36.44) in July 2025 from £22.85 ($35.07) in July 2024, but this growth lags behind pre-pandemic levels. With inflation at 2.6%, real wage gains are shrinking, threatening £1.2 trillion ($1.84 trillion) in consumer spending power.

Long-term unemployment is also rising, with the average duration now at 24.1 weeks, the longest in over three years. 'This is absolutely the worst major economic report since the end of the pandemic era,' noted Joe Brusuelas, chief economist at RSM US, pointing to a growing number of discouraged workers. This trend, coupled with a 258,000 downward revision to May and June job gains, signals deeper vulnerabilities.

The Federal Reserve's decision to hold interest rates at 4.25%-4.50% reflects caution, balancing inflation risks with labour market weakness. Economists forecast a modest 80,000 jobs added in August, with unemployment steady at 4.2%, but further deterioration could force rate cuts. Black unemployment, at a four-year high of 7.2%, signals broader market struggles, often a precursor to wider economic slowdown.

Despite these challenges, some sectors remain resilient. Government employment grew by 709,000 in 2023, surpassing pre-pandemic levels, but private sector hiring lags. The job market's future hinges on policy clarity and Federal Reserve actions, with fears of a recession growing among Americans, according to X posts.

Economic policy uncertainty disrupts consumer spending, manufacturing, and corporate resilience, threatening America's recovery.