Weak turnover in July confirms stagnating labor market

The dog days of summer hit the job market hard in July.

While job openings, signaling employers’ intent to hire, picked up in July, actual hires fell last month, according to the latest Job Openings and Labor Turnover Survey (JOLTS) from the Bureau of Labor Statistics, as employers have pulled back on hiring amid economic uncertainty. At the same time, both quits and layoffs and discharges declined in July. For workers, the labor market’s current “low-hire, low-fire” conditions signal that it might be better to stay put.

“These measures [hirings and quits] indicate movement, and often the movement that spells higher wages and better professional satisfaction. Both have been lackluster for some time, however, as employers aren’t bringing on many new workers, so workers have few options for upgrading their career,” Elizabeth Renter, senior director of economic insights at Life360, wrote on LinkedIn.

Diving into the data. Employers reported 7.3 million job openings at the end of July, a slight increase from June, the number for which was downwardly revised by 177,000 to 7.2 million.

Durable goods manufacturing reported the strongest increase in postings, up by 76,000 between June and July, followed by state and local government (up 65,000), and healthcare and social assistance (up 54,000). Meanwhile, transportation, warehousing, and utilities reported the steepest decline in job postings, down 67,000, followed by professional and business services (down 65,000) and leisure and hospitality (down 42,000).

Hires, meanwhile, fell to 5.1 million in July, down from 5.3 million in June. The hires rate declined to 3.2%, its lowest since February 2026 and April 2020 (the latter marking the end of the Covid-19 recession) when the hires rate was 3.1%. A hiring rate this low is atypical, economists said, because it’s usually associated with an unemployment rate as high as 9%. The unemployment rate for July was 4.1%, according to last month’s jobs report.

“This goes to show how unusual the sluggish hiring environment we’re in is, especially for a job market that is relatively stable (or stale, depending on your point of view),” Daniel Zhao, Glassdoor’s chief economist, wrote on LinkedIn.

Professional and business services reported the steepest decline in hires between June and July, down by 188,000, followed by finance and insurance (declining 37,000) and transportation, warehousing, and utilities (down 32,000).

At the same time, total separations (including quits and layoffs and discharges) fell from 5.3 million in June to 5.1 million in July. Within that, quits declined from 3.2 million to 3.1 million in that same time period, while layoffs and discharges fell from 1.8 million to 1.7 million. For individuals who are currently employed, there’s incentive to stay put.

“If you *have* a job already, you’re exceptionally secure in it for the time being,” Guy Berger, a labor economist and senior fellow at the Burning Glass Institute, wrote on LinkedIn, adding that those “who already have a job also have a good read on the job market—there isn’t much out there.”

Zoom out. The labor market saw a brief resurgence earlier this year, when 425,000 cumulative job gains were reported in March, April, and May. That’s since fizzled out: Preliminary employment data for July found the economy lost 23,000 jobs that month.

“The small labor market recovery of early 2026 appears to be slowing or even stalling (not reversing). In July, we saw a firming of the no-hire, no-fire dynamic—weaker hiring, even lower layoffs,” Berger wrote.

A big driver of this stagnation is likely economic uncertainty: “Companies big and small depend on a stable economic outlook to make staffing plans. If you’re unsure of where the economy is headed, you may hold on expanding and adding more people to the payrolls,” Renter wrote. Employers have faced their fair share of uncertainty since the start of the pandemic, but trade policies and an ongoing war with Iran instigated by the Trump administration now “are giving that lack of clarity a decidedly negative bias,” she added.