In a clear warning sign for the economy, the latest U.S. Bureau of Labor Statistics (BLS) report, released September 5, showed that the United States added only 22,000 jobs last month — far short of the 75,000 economists had predicted.
The report also noted a slight uptick in the national unemployment rate to 4.3% from 4.2%. Excluding the pandemic years, this marks the highest unemployment rate since September 2017. For months, the figure had held steady between 4.0% and 4.2%, suggesting a relatively stable labor market.
The new numbers indicate that the BLS may finally be catching up with conditions long apparent on the ground, where anecdotal reports and various economic surveys have pointed to a cooling job market and increasing difficulty for workers trying to land positions.
Until now, steady unemployment data suggested the U.S. was in a “Goldilocks zone” of employment — a balance where structural and frictional unemployment offset one another and new jobs were created at roughly the same pace as old ones disappeared.
Yet despite this indicator of stability, employment specialists, labor economists, and job market consultants have been approaching the BLS numbers with growing concern.
A major factor behind current job market struggles is President Donald Trump’s economic policies. Since taking office in January, the president has slapped tariffs on major economies with little restraint.
Another factor weighing on the job market is the impact of the Federal Reserve’s 11 interest rate hikes in 2022 and 2023.
READ: Fresh out of college, I landed a job at a major tech company. Three years later, I can’t find work. (September 6, 2025)
“Uncertain about where things are headed, companies have grown increasingly reluctant to hire, leaving agonized jobseekers unable to find work and weighing on consumers who account for 70% of all U.S. economic activity,” the Associated Press reports. “Their spending has been the engine behind the world’s biggest economy since the COVID-19 disruptions of 2020.”
Surveys reflect this growing unease. The University of Michigan’s August Surveys of Consumers found that a majority expect economic conditions to worsen, with 62% predicting higher unemployment in the year ahead.
That pessimism may be rooted in signs of a weakening job market despite headline unemployment figures appearing “stable.” So far in 2025, 81,972 tech workers have been laid off, according to layoffs.fyi, which tracks firings. The cuts peaked at 24,545 in April, with another 16,142 in July alone.
Massive redundancies have been reported across tech giants: Intel is cutting 2,400 employees in Oregon, Indeed and Glassdoor are slashing 1,300 jobs, and Microsoft has announced layoffs for 9,000 workers. And these numbers may only scratch the surface when set against broader labor market trends and on-the-ground realities.
Young professionals struggle to land jobs
The story of Gaithersburg, MD, resident Frank White (name changed upon his request) reflects a broader reality in today’s U.S. job market. At 25, White seemed well-positioned for success: he attended a nationally ranked magnet program in high school, earned a computer science degree from Columbia, and quickly landed a job at the company after graduating in 2022. (‘White’ is a pseudonym; similarly the name of his schoo has been changed as he is currently seeking a job.”)
White spent two years at a social media company in San Francisco before being laid off. Almost immediately, he joined a Bay Area startup for nine months but left when he felt his interests no longer aligned.
However, when he tried to re-enter the job market, things looked very different. The search has been rough, with submitting applications almost feeling like sending them into a void, he says, adding that despite sending out hundreds of résumés, responses have been scarce.
“The competition is staggering. I was on LinkedIn the other day, and I was looking at this job that said it had 3,000 applications, and in a pool that large, the odds of being noticed feel almost nonexistent, especially with recent graduates.”
While overall unemployment remains steady, new graduates face sharply higher joblessness. For software engineers, senior talent is still in demand, but entry-level roles are drying up, White says.
White believes part of the shift comes from artificial intelligence.
“Companies like Amazon have even talked about replacing entry-level engineers with AI agents within a few years, and it’s clear businesses are increasingly relying on AI,” he says. “At the same time, with startup culture growing, it feels like the dominance of big tech is fading as smaller companifes take more of the spotlight.”
Naman Pandey, a business analytics professional at Cushman & Wakefield and host of the Ready Set Do podcast, shared the example of the struggles of another accomplished young professional:
“A close friend [name withheld for privacy reasons] finished his master’s degree in data science, and has been applying for jobs for over 3 months now. In an attempt to demonstrate his expertise, he rebuilt from scratch the recommendation system UberEats uses to suggest restaurants to its users. I have tried his project first-hand, and the result absolutely blew me away. The point is, that he’s an incredibly talented data scientist, with great communication skills as well as proven expertise in the domain via internships and projects. However, presently, he is working for free at a NYC-based materials start-up. Yes, he is working without any compensation just to be able to add experience on his resume and be able to leverage that for an actually paying job elsewhere. And he is not the only one in this situation.”
Low unemployment rate masks uneven opportunities
While the new entrants to the job market are struggling with the stability of jobs available; those looking for a career re-orientation, are questioning the quality of available jobs. Victor A. Espinosa, VP, Global Business Development at real estate investment firm, Peachtree Group, explaining the paradox, says,
“The unemployment rate masks unevenness beneath the surface.” He explains, “A 4.2% unemployment rate should inspire confidence, as a figure at this level indicates a stable labor market overall; yet the U.S. consumer sentiment paints an interesting picture: Americans are questioning job prospects within specific labor markets and industries.”
Stagnant wages, layoff notices in high-skilled sectors, and scarce entry-level opportunities all point to gaps beneath the headline numbers. Erica Reckamp, a C-suite job search consultant at The Captivators, which helps senior leaders and board candidates stand out with compelling résumés and career bios, explained:
“The unemployment rate only reveals so much. It does not show many of the hidden job seekers. Many executives and C-level leaders may receive severance, yet face extended searches that can last one year or more. This forces some into early retirement or consulting, even if they would rather continue to contribute at a high level through full-time employment.”
She added: “Consultants and gig workers face similar challenges when opportunities diminish. Contracts become sparse, yet it is increasingly difficult to land formal employment with ever-ballooning candidate pools. Also, most freelancers don’t qualify for unemployment, even if their finances become tight.”
Even as some sectors face bleak prospects, others continue to grow. Ingrid Perez, an employment immigration attorney and founder of IBP Immigration Law, explained: “Healthcare, for example, remains an increasingly demanding field due to aging populations and national-level shortages. We can’t outsource healthcare, so it’s no surprise this field continues to grow. Other fields, mainly tech, are seeing a decrease in demand fueled by AI. I think people in other industries see this and they think they’re next on the chopping block.”
Employment trends, market signals and investor sentiment
For investors, labor markets remain a key barometer of opportunity and confidence. But do factors such as Trump’s tariffs and broader economic uncertainty dampen cross-border investment appetite and stall new opportunities? Peechtree Group’s Espinosa, who has raised capital globally in real estate and other sectors, believes the U.S. continues to hold its edge. He says, “Global capital still views the U.S. as a resilient destination, an economy that still provides safety, stability and an opportunity for diversification of risk.”
He adds, “I regularly engage with cross-border investors, primarily high-net-worth investors (HNWIs) and they consistently allocate their capital to the U.S. They observe that the U.S. market provides economic and political stability, strong and transparent markets, currency and dollar reserve status and most importantly asset protection away from their home country risk.”
Erica Reckamp, meanwhile, traces the forces that have shaped today’s challenging employment landscape. She says, “Due to the white-collar recession, high-volume layoffs in tech after labor hoarding post-Covid and massive hiring surges that outpaced demand, and ever-evolving confusion around tariffs that make businesses hesitant to invest, we are seeing unprecedented levels of well-educated talent who are accustomed to landing great roles struggling to find anything. Many of these people are searching ‘off the radar.’”
But the U.S. continues to attract high-net-worth investors, driven by factors such as its robust security and relative stability. Espinosa agrees: “Cross-border families view the U.S. labor market as a market that does not experience much volatility compared to their home country,” he says, adding, “They often note that the U.S. unemployment rate is well below the global average. Employment data is not just an economic metric; it is a measure of confidence. For cross-border investors, it shapes expectations about consumer demand, sector resilience, financing conditions, and ultimately, whether U.S. assets are seen as growth opportunities or just a safe-haven parking spot.”
Quality of jobs, versus quantity
But it’s not just beginners who are struggling. What happens when highly skilled professionals find themselves in a job market slowed by trade tensions, shifting tariffs, and economic uncertainty?
Espinosa explains: “Much of the underlying concern lies within supply dynamics; the disconnect between quality of jobs versus quantity of jobs available in the market. While people may technically hold jobs, many feel underemployed, or stuck in roles that don’t match their skills or career aspirations.”
He adds: “Wage growth has stalled, and much of the new hiring is concentrated in lower-paying service positions, while higher-skilled sectors—like technology—continue to shed workers, partly due to the increased implementation of AI. The labor market today might not offer an array of strong entry-level opportunities which reinforces a sense of insecurity.”