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Newsweek
10-07-2025
- Business
- Newsweek
Hiring Plans Hit Record Low As Job Market Shows Signs of Cooling
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. American CEOs are reporting record-low workforce expansion plans, despite the past few days seeing a series of encouraging readings on the health of the labor market. According to executive coaching and advisory firm Vistage, only 42 percent of surveyed small and midsize business CEOs anticipate increasing their employee headcount in the year ahead. This is the lowest level since Vistage began conducting the quarterly survey in 2003, and is down from 45 percent in the first quarter of 2025. Meanwhile, 13 percent expect to trim their workforce over the next year, in line with first-quarter levels but at a rate Vistage says has only been seen "during the COVID-19 pandemic and in recessions." Why It Matters While recent payroll figures point to resilience in the labor market, the record-low hiring plans highlight persistent economic caution in the private sector and concerns over business conditions, as well as trade and tariff pressures. What To Know Based on responses from 1,537 surveyed between June 2 and 16, Vistage's CEO Confidence Index dropped to 77.2 points in the second quarter, down from 78.5 for the first three months of the year and well below the 100.8 reading at the end of 2024. Half those surveyed reported that business conditions had worsened over the past 12 months, compared to only 17 percent who think these have improved. Over two-thirds (69 percent) say trade and tariff policy has negatively impacted their business either directly or indirectly, and 49 percent plan to implement price increases during the current quarter. However, encouraging signals that the labor market remains resilient have left economists questioning the actual trajectory of the employment landscape. Recruiters at the KeySource booth at the Mega JobNewsUSA South Florida Job Fair held in the Amerant Bank Arena on April 30, 2025, in Sunrise, Florida. Recruiters at the KeySource booth at the Mega JobNewsUSA South Florida Job Fair held in the Amerant Bank Arena on April 30, 2025, in Sunrise, survey was conducted prior to the most recent nonfarm payrolls report from the Bureau of Labor Statistics (BLS), a closely monitored indicator considered a measure of both economic and labor market health. The unemployment rate dipped to 4.1 percent from 4.2, while the economy added 147,000 jobs in June, with state government and health care seeing the greatest gains. This was up from 144,000 the previous month and surpassed forecasts of 100,000. While treated by some as evidence of endurance in the jobs market, others were skeptical of the results beyond the encouraging topline figures. Cory Stahle, economist at Indeed Hiring Lab, wrote: "The U.S. job market continues to largely stand tall and sturdy, even as headwinds mount—but it may be a tent increasingly held up by fewer poles." "The headline job gains and surprising dip in unemployment are undoubtedly good news," he continued, "but for job seekers outside of health care & social assistance, local government, and public education, the gains will likely ring hollow." On Thursday, the Department of Labor released its weekly count of initial jobless claims. The number of Americans filing for unemployment insurance for the first time. The figure dropped by 5,000 to 227,000 for the start of July, well below forecasts and marking the fourth consecutive weekly decline. What People Are Saying Vistage's Chief Research Officer Joe Galvin told Newsweek: "While June's jobs report offered a dose of optimism, caution continues to define the underlying sentiment among CEOs. Our latest data shows that confidence among small and midsize business leaders continues to wane, driven by persistent economic uncertainty, geopolitical tensions, on-and-off-again tariffs, and a wait-and-see approach to interest rates. "Even with signs of resilience in the labor market, many CEOs are holding back on workforce expansion and investment plans amid concerns about rising costs and the evolving impact of AI on productivity. In fact, for the first time in many years, they are starting to consider reducing their workforce. "The Fed's anticipated rate cuts later this year could provide some relief, but until there's more clarity, business leaders are likely to remain on the defensive, focusing on efficiency, agility, and resilience to navigate an extended period of disruption that economists predict will not slow anytime soon as we head into the second half of the decade," he added. Nancy Vanden Houten, lead U.S. economist at Oxford Economics, said of Thursday's initial jobless claims data: "The latest jobless claims data were influenced by seasonal quirks, including the summer shutdown of auto plants, but remain consistent with a labor market characterized by both a slow pace of hiring and relatively few private-sector layoffs. For now, the labor market is healthy enough to allow the Federal Reserve to keep interest rates unchanged as it assesses the impact of tariffs on inflation. "Claims for benefits by federal employees remain low but that will likely change soon. The Supreme Court earlier this week ruled that the Trump administration may proceed with layoffs of federal workers while legal challenges continue." Bill Adams, chief economist for Comerica Bank, in comments shared with Newsweek, said: "The June jobs report's details were considerably weaker than the headline. State and local government jobs accounted for nearly half of the monthly gain, and within private employment, all of the net increase was in health care, social assistance, leisure and hospitality." "It seems clear that job creation will be in low-gear near-term as the private sector digests tariff increases," he added. "Hopefully, job creation will get a boost from 2026's tax cut, although cuts to Medicaid spending would cut into employment in health care and nursing homes." What Happens Next? Should the U.S. labor market hold steady, this could delay any action by the Federal Reserve on rate cuts, despite pressure for these from certain Fed officials and President Donald Trump. However, this remains contingent on a range of factors, including next week's inflation reading and potential shocks to the labor market.
Newsweek
02-07-2025
- Business
- Newsweek
US Layoffs Are Slowing, But Companies Are Staying 'Cautious' on Hiring
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. Job cuts slowed significantly in June, according to a report released Wednesday, bucking the trend of mass layoffs and government-sector redundancies that has defined the first half of 2025. According to outplacement firm Challenger, Gray & Christmas (CGC), U.S.-based employers announced 47,999 job cuts last month, a 49 percent drop from the 93,816 in May. It also was 2 percent lower than the 48,786 announced the same month last year. Why It Matters The year has been marked by a surge in layoffs across the tech and retail sectors, as well as an unprecedented reduction in headcounts at government agencies driven by the Department of Government Efficiency (DOGE). While CGC's report shows that the trend may be slowing, other data released Wednesday point to sustained difficulties for the U.S. labor market. People line up as they wait for the Mega JobNewsUSA South Florida Job Fair to open at Amerant Bank Arena on April 30, 2025, in Sunrise, Florida. People line up as they wait for the Mega JobNewsUSA South Florida Job Fair to open at Amerant Bank Arena on April 30, 2025, in Sunrise, To Know According to CGC, the second quarter of 2025 saw 247,256 job cuts. Despite improvements in June, it still marks the highest total for the three-month period since 2020 at the height of the COVID-19 pandemic, when 1.2 million cuts were announced. It is also up 39 percent from the 177,391 announced in the second quarter of 2024, but less than half of the 497,052 announced last quarter. Planned layoffs have totaled 744,308 this year, the highest first-half total since 2020, and rivaling the 896,675 announced in the first half of 2009 following the financial crisis. June saw the continuation of government-sector job cuts, with 3,801 announced, up from 2,600 in May. That brings the total for the year to 288,628, many of which CGC attributes to the actions of DOGE. However, the firm noted that many remain in "legal limbo" because of court challenges to the department's cost-cutting efforts. By sector, retail has led the private sector in terms of job cuts this year at 79,865, up 255 percent from the first half of 2024. The sector has long struggled as a result of declining foot traffic and the rise of e-commerce, and has more recently grappled with inflation, tariffs and the impact of both on consumer confidence and spending. Announced planned hires dropped to 3,191 in June, CGC also found, the lowest monthly total this year and well below this year's monthly average of 13,822. CGC's analysis coincides with the release of the ADP National Employment Report, a monthly measure of changes in private-sector employment in the U.S. It showed that private payrolls dropped by 33,000 jobs in June, following a downwardly revised increase of 29,000 in May. This was far below the consensus forecast of economists, who had penciled in an increase of 95,000, and marks the first decline since March 2023. The drop was led by losses in the services sector, particularly in roles tied to professional and business services, as well as health and education. This was only partially offset by boosts to hiring on the goods-producing side. What People Are Saying Andrew Challenger, senior vice president at Challenger, Gray & Christmas: "The bulk of companies cited economic conditions last month. We saw some DOGE activity and have tracked over 2,000 jobs directly attributed to tariffs this year, but for the most part it was a quiet June. "Hiring announcements in 2025 suggest a cautious but stabilizing labor market. While companies are clearly adding workers at a higher rate than in 2024, the restraint shown relative to previous years indicates continued uncertainty around costs, automation, and the broader economic outlook. Without a strong economic driver, hiring may remain measured through the rest of the year." Dr. Nela Richardson, chief economist at ADP: "Though layoffs continue to be rare, a hesitancy to hire and a reluctance to replace departing workers led to job losses last month." Bill Adams, chief economist for Comerica Bank, in comments shared with Newsweek: "Tariff hikes and policy uncertainty gave employers reason to be cautious toward hiring in the second quarter. The Israel-Iran war was a further reason to put hiring plans on hold in June. "Hiring will likely stay slow in the second half of 2025. Ordinarily, job growth malingering at the second-quarter's sluggish pace for half a year would translate into a meaningful increase in the unemployment rate, which would pressure the Fed to cut rates this fall." What Happens Next The next key jobs data comes on Thursday morning, when the Bureau of Labor Statistics will release its nonfarm payrolls report for June. This is following a stronger-than-expected May that saw the addition of 139,000 jobs. Analysts polled by TradingEconomics anticipate 100,000-job increase for June and for the U.S. unemployment rate to remain flat at 4.2 percent.
Newsweek
05-06-2025
- Business
- Newsweek
Map of States Trump Won in 2024 Where Unemployment Claims Are Increasing
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. Unemployment claims rose by about 8,000 nationally for the last week in May, including in states President Donald Trump won in 2024. Why It Matters Trump successfully ran last election cycle predominantly on issues including the economy and illegal immigration and has said that inflation during President Joe Biden's tenure turned the economy "to hell." Currently, Americans and business owners are bracing for the uncertainty tied to the Trump administration's tariffs on countries like China, and industries including steel and aluminum. What To Know New data published Thursday by the Department of Labor shows a weekly increase of about 8,000 new applications for jobless benefits for the week ending May 31, bringing the total to 247,000. The increase was the highest since October. Weekly applications have typically ranged between 200,000 and 250,000 since layoffs and firings became more routine during the COVID-19 pandemic and global economic turmoil, according to the Associated Press. The biggest changes in week-to-week claims came from Kentucky (3,976), Minnesota (2,377), Tennessee (1,765) and Ohio (1,146). A report from payroll company ADP issued on Wednesday showed 37,000 jobs were added by private employers in May, which was less than expected. Trump has called on Federal Reserve Chair Jerome Powell repeatedly to cut interest rates, as higher rates place pressure on employment by increasing borrowing costs for businesses, potentially limiting investment. But the central bank is tasked with keeping prices stable, and it is wary of the inflationary impact of Trump's tariffs and those imposed on the U.S. in retaliation. Powell has critiqued the tariffs for the potential negative ramifications on inflation and unemployment. In May, the Federal Reserve held its benchmark lending rate at 4.3 percent for the third straight meeting, following three cuts last year. The newest job numbers arrive as Republicans try to push Trump's "Big, Beautiful Bill" through the Senate. Issues like Medicare and the turbulence of general consumer sentiment because of tariffs have been heavily debated by lawmakers. Job seekers stand in line at the Wyndham Destinations booth during the Mega JobNewsUSA South Florida Job Fair in the Amerant Bank Arena on April 30, 2025, in Sunrise, Florida. Job seekers stand in line at the Wyndham Destinations booth during the Mega JobNewsUSA South Florida Job Fair in the Amerant Bank Arena on April 30, 2025, in Sunrise, Holzer, a public policy professor at Georgetown University and senior fellow at the Brookings Institution, told Newsweek via phone that a country with "enormous uncertainty" economically could result in a reluctance to invest. It can also make more companies than not hesitant to hire new workers. If it looks like there's going to be an economic slowdown, individuals will likely postpone any plans they might have had to open new businesses or to expand existing ones," Holzer said. "It's so hard to answer any questions because we don't know where the tariffs are going to end up. Every day, Trump changes his mind. He pulled way back on those huge China tariffs but then topped the tariffs on aluminum and steel. "Some people say, 'Well, he's just going to use them as leverage to try to cut deals with these different countries.' Other people say, 'No, they should be real and they should last.' It depends where you land and where they land. Personally, I think in the meantime everybody's in a wait-and-see mode." That mode of patience will affect individuals and business owners differently based on sectors and industries, Holzer added. People in the service industry, for example, may not be directly affected by tariffs but might be indirectly affected. What People Are Saying Treasury Secretary Scott Bessent, on CBS' Face the Nation: "When we were here in March, you said there was going to be big inflation. There hasn't been any inflation. Actually, the inflation numbers are the best in four years. So why don't we stop trying to say this could happen—wait and see what does happen." Louisiana Senator John Kennedy, a Republican, on MSNBC's Morning Joe on June 5: "We're in uncharted waters here with the tariffs. I think the markets are telling us that. We don't know what impact they're going to have on the economy. But if we don't extend those tax cuts, we're going into a recession, and our economy's going to be on a journey to the center of the Earth." What Happens Next The Federal Open Market Committee is scheduled to meet June 17-18 to set monetary policy.
