The U.S. labor market continued to move forward in August, although the pace was slower than anticipated. Employers added just 22,000 jobs, well below economists’ projections of around 75,000. The unemployment rate also edged up to 4.3%. Healthcare once again carried the month with a gain of 46,800 jobs, while industries such as government, manufacturing and wholesale trade pulled back.Additionally, a recent revision of job market data by the Bureau of Labor Statistics (BLS) shows the economy added 911,000 fewer jobs in the 12 months ending March 2025 than earlier reports had suggested. This downgrade was also larger than economists had expected.This adjustment accounts for business openings and closures not fully captured in the agency’s monthly surveys and reflects the ongoing churn in the U.S. economy. In addition to current macroeconomic conditions, the lingering effects of the recent pandemic—which accelerated both shutdowns and new business formation—are likely influencing the numbers we see today.The trend toward less hiring activity isn’t just showing up in payroll data. According to the latest Job Openings and Labor Turnover Survey (JOLTS), there were 7.2 million openings in the U.S. at the end of July. In June, that figure was 7.4 million—down from 7.8 million in May. Hires and quits were also little changed in July, a sign that many employers and employees are holding back on making big moves.
A labor market where increased hiring precision meets staffing flexibility
Taken together, the latest BLS figures suggest that many employers are hiring with greater precision and taking care not to overexpand their workforce. They are being more selective about which roles they add, prioritizing those that drive growth, protect revenue or manage risk. And because economic conditions remain uncertain, many businesses are also embracing a scalable staffing model.Leaning on contract, project-based and interim support allows businesses to keep critical initiatives on track while supporting a more measured approach to permanent hiring. This model helps them to:Respond quickly to changing demand. If sales accelerate, digital transformation projects suddenly expand or compliance deadlines move up, contract talent can bridge gaps immediately.Add specialized skills without long-term commitment. Whether it’s implementing a new enterprise system, handling the year-end close or shoring up cybersecurity, organizations can bring in entire teams of skilled talent on demand for exactly as long as needed.Test future roles. Contract-to-hire strategies give employers a chance to evaluate a professional’s skills and ability to thrive in the company’s workplace culture before extending a full-time offer.For job seekers with in-demand skill sets, the shift toward flexible staffing creates opportunity. Contract roles can be a savvy career move in the current climate, offering steady income, exposure to new industries and a potential path to permanent employment.Working on a contract basis can also be a long-term career choice: In a recent Robert Half survey, 71% of professionals said they would consider contract work instead of a permanent role.
Employer insights: How to build stronger teams in a challenging labor market
While many companies are slowing expansion, they can’t afford to lose momentum on key projects or risk losing valued employees. In this environment, employers should strive to:Reduce complexity in hiringLong and complicated hiring processes can easily lead to lost candidates. Align stakeholders early, define must-have vs. nice-to-have skills, and keep the interview process as streamlined as possible. And when the work can’t wait, supplementing core teams with contract talent can keep projects moving ahead while allowing the business to focus on strategic—but efficient—talent recruitment.Invest in skills-building for current staffEven when economic conditions are uncertain, employees expect access to professional growth opportunities. Formal training in areas like data literacy and AI can help close capability gaps while boosting retention. Now is an especially good time to focus on professional development: Robert Half research shows 73% of workers plan to stay in their current roles through the end of 2025, giving employers a window to step up efforts to invest in internal talent.Make continuous learning a cornerstone of the company’s cultureBeyond offering formal training, employers need to build an environment where curiosity and adaptability are encouraged every day. That means giving staff room to experiment with new technologies, test new ideas, learn from mistakes and share knowledge. A workplace culture that promotes continuous learning doesn’t just future-proof the business—it signals to employees that their growth matters, which deepens engagement and loyalty.
Insights for job seekers: How to stay competitive in a less active hiring market
For those who are on the job hunt, navigating the current labor market can be daunting. To stay marketable and stand out to hiring managers, candidates should:Commit to building in-demand skills continuouslyMany employers are particularly interested in hiring candidates with knowledge of AI tools, automation, analytics, compliance and project management. But technical know-how alone isn’t enough to land—or keep—a job in today’s business environment. Professionals who prioritize continuous learning, including self-driven learning, will be better positioned to adapt as roles evolve.Expand networks to help generate leads and referralsStrong professional networks are valuable at every career stage. Referrals from reputable and trusted contacts remain one of the most effective pathways to employment. For employers, referrals cut through crowded applicant pools and help reduce the risks that come with AI-generated applications. For job seekers, they provide a vote of confidence that can carry as much weight as skills and experience.Leverage flexible roles for long-term career growthAs noted earlier, contract or project-based assignments can provide professionals with much more than income. These jobs provide opportunities to develop skills and experience and often lead to permanent opportunities. They also give workers a chance to better balance personal priorities or explore new career directions. Increasingly, modern careers are built on contract roles.Looking for contract jobs? Start by searching our current job listings.
Looking ahead: trends to watch
The latest labor market data signals a significant cooling trend. For many employers, the road ahead means hiring strategically while maintaining a flexible staffing approach to support evolving priorities. For professionals, it’s about staying open-minded, adaptable and persistent.Across the remainder of 2025, expect persistent shortages of skilled talent, the expanded use of advanced technology like AI and machine learning, and ongoing business transformation to continue to influence how organizations build teams—and how workers advance their careers.
Stay informed about the latest labor market trends—with Robert Half
View Labor Market OverviewWant more data and insights on how the U.S. hiring environment is evolving in the second half of 2025? Visit Robert Half’s Labor Market Overview page to get a snapshot view of current hiring trends and access our expanded coverage on industries hiring, remote work statistics and trends, and more.
