The labor market is like those slimy pests that love eating the tomato plants growing in your garden: sluggish.
Ahead of this summer, economists expressed concern that existing economic uncertainty and new turmoil driven by President Trump’s ongoing tariff threats could send the labor market into a tailspin. While that hasn’t occurred, the latest job openings and labor turnover summary (JOLTS) data for June from the Bureau of Labor Statistics suggests that the labor market is continuing its slow but steady cooldown.
In some ways, it’s a blessing and a curse: While the job market hasn’t gone off the deep end, its continual stagnation is also creating its own problems. For example, as fewer opportunities open up externally, employees will be less likely to quit, stalling internal mobility opportunities.
“The story is not one of a job market that is collapsing. Instead, we see much like we’ve seen in the last few months, that the job market is cooling gradually,” said Daniel Zhao, Glassdoor’s lead economist. “But we are still seeing the same pattern in the JOLTS data that has helped explain why workers feel so sour about the current job market.”
Diving into the data. Employers had 7.4 million job openings posted at the end of June, a decline of 275,000 from the previous month. Accommodation and food services saw the biggest drop in openings, declining by 308,000 to 754,000 in June. That was followed by healthcare and social assistance (declining 244,000) and finance and insurance (down 142,000).
Meanwhile, retail trade increased by 190,000 to 656,000 job openings, the highest monthly increase for the June data, followed by professional and business services increasing by 156,000, and information by 67,000.
Meanwhile, organizations made 261,000 fewer hires month over month, recording just 5.2 million hires in June. Professional and business services recorded the steepest monthly drop in hires between May and June, reporting 936,000 total hires, a decline of 133,000 month over month. That was followed by accommodation and food services (declining 106,000), and arts, entertainment, and recreation (falling 42,000).
The number of employees quitting declined by 128,000 to 3.1 million, while layoffs and discharges remained relatively unchanged at 1.6 million in June. With total separations, professional and business services declined by 56,000 to a total of 944,000 for the month. Meanwhile, retail trade recorded the highest spike in separations, increasing by 31,000 to 612,000 in June—of that total, 440,000 were employees quitting.
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What about AI? As speculation over whether AI is replacing white-collar jobs mounts, including in professional services and finance, some experts have surmised that the technology could be a factor in job turnover plummeting for these sectors.
However, it’s likely that macroeconomic factors prompting cost-cutting measures, including offshoring jobs and layoffs, are what’s really driving a slowdown in these fields. While some jobs, such as administrative services, might be more susceptible to employers wanting to replace workers with AI, this interest is still being driven primarily by cost savings, Zhao said.
“I think it’s hard to see evidence that AI is specifically driving the slow down in jobs growth that we’re seeing. Instead, I suspect it’s a little bit reversed where, right now, jobs growth in general is slow, and that’s being driven by macroeconomic factors rather than AI,” Zhao added.
Zoom out. As economic uncertainty persists, employers will have to be prepared for the labor market to shift in any direction. That’ll mean continuing to plan for a myriad of scenarios, according to Zhao.
“Given how much uncertainty there is right now, it would be irresponsible to stick our heads in the sand and pretend that there is only one path forward.”
HR leaders will want to keep an eye on their workers as well. With fewer opportunities opening up internally and externally, workers are more and more susceptible to resentment and disengagement, Zhao claims.
“I think it’s important for HR leaders to recognize that employee disengagement is likely to be a significant problem right now, and might even be worse than in other job market contexts,” Zhao said, “because so many workers are prioritizing job security and would rather sit in place in a job where they are disengaged and unhappy rather than test the waters on the open market.”