What the August 2025 Jobs Report Means for Employers
The August 2025 jobs report from the Bureau of Labor Statistics showed clear signs of a slowing labor market. Only 22,000 jobs were added, the unemployment rate rose to 4.3% (its highest since October 2021), and wages increased 0.3% month-over-month.
For employers, this points to a labor market that is still functioning but cooling to its weakest pace in more than a decade.
Key Takeaways from the August 2025 Jobs Report
- 22,000 jobs were added, well below forecasts of 80,000
- Unemployment increased to 4.3%, with 7.4 million unemployed workers
- Labor force participation held at 62.3%
- Average hourly earnings rose 0.3% from July and 3.7% year-over-year
- June was revised from +14,000 to -13,000, the first month of job losses since 2020
Job Growth by Sector
Hiring was narrowly concentrated in healthcare (+31,000) and social assistance (+16,000). Outside of these two areas, most industries were flat or declining.
Losses were recorded in:
- Federal government (-15,000, down 97,000 since January)
- Manufacturing (-12,000, including -15,000 in transportation equipment due to strikes)
- Wholesale trade (-12,000)
- Mining/quarrying/oil and gas (-6,000)
- Professional and business services (-17,000)
Sectors such as construction, retail trade, transportation and warehousing, financial activities, and leisure and hospitality showed little movement, reinforcing the uneven nature of current hiring trends.
Unemployment and Labor Force Participation
The unemployment rate rose to 4.3%, up slightly from July but still the highest since late 2021. In total, 7.4 million people were unemployed in August, suggesting job seekers are facing more difficulty securing work even as some industries continue to hire.
Participation held steady at 62.3%, while the employment-population ratio remained unchanged at 59.6%. Both measures are down 0.4 points compared to last year, pointing to a gradual retreat in workforce engagement despite population growth.
Long-term unemployment remains a challenge: 1.9 million people have been out of work for 27 weeks or longer, representing more than one in four unemployed workers. Meanwhile, the number of new entrants seeking jobs fell after July’s brief uptick, signaling uneven momentum for those entering or reentering the workforce.
Wage Growth
Wage growth continued at a steady pace. Average hourly earnings increased 0.3% in August and have risen 3.7% over the past year. For production and nonsupervisory workers, wages grew slightly faster, up 0.4% during the month.
Hours worked remained largely unchanged. The average workweek held steady overall, while manufacturing hours edged down slightly.
Broader Labor Market Trends
Beyond the month’s topline numbers, several broader patterns are shaping workforce conditions:
- Slower momentum: Job gains have averaged just 29,000 per month over the last three months — the weakest pace since 2010 outside the pandemic years.
- Goods-producing sectors under pressure: Manufacturing, mining, and related industries have now declined for four consecutive months, weighed down by tariffs and supply chain concerns.
- Healthcare as the growth driver: While healthcare continues to add jobs, it represents only 15% of overall employment, leaving limited opportunities for most of the workforce.
- Policy uncertainty: Federal budget cuts, tariffs, and immigration shifts are adding volatility and making workforce planning more difficult.
Together, these signals highlight a labor market that is still active but increasingly fragile.
What Employers Can Do
Employers navigating a cooling labor market may want to adapt their strategies:
- Prioritize essential roles. Focus on mission-critical positions that protect business continuity.
- Broaden candidate pipelines. Consider transferable skills, adjacent industries, and underrepresented talent pools.
- Plan for uncertainty. Build flexibility into workforce plans to prepare for potential disruptions.
- Use staffing for agility. Temporary and project-based staffing offers a way to maintain productivity without long-term commitments.
Employer Outlook
Looking ahead, the labor market is expected to remain fragile through the fall. Job gains are concentrated in healthcare and social assistance, while goods-producing sectors continue to face headwinds.
For employers, this means:
- Hiring will remain uneven. Competition may intensify in sectors with limited growth.
- Workforce planning will be harder. Policy shifts and economic uncertainty may cause sudden changes in labor demand.
- Staffing flexibility will be critical. Employers who can scale teams up or down quickly will be better positioned to manage volatility.
Together, these signals suggest a cautious outlook — employers will need to balance short-term workforce needs with longer-term planning as conditions evolve.
Put Insights Into Action
Looking for ways to adapt these strategies to your own workforce planning? Verstela helps employers interpret labor market signals and design staffing approaches that balance stability with agility.
→ Explore Employer Resources for hiring tools and workforce insights.
Want to talk through how these trends could affect your business directly?
→ Connect with our team to discuss tailored workforce strategies.
