Trends in the U.S. Labor Market: Job Stability and Economic Uncertainty

Recent analyses indicate that American workers are increasingly reluctant to change jobs as the labor market cools. According to a report from the Bank of America Institute, which analyzed deposit data from millions of customers, the job change rate has slightly increased this year but remains significantly lower than during the "Great Resignation" period of 2021. During that time, over 20 million workers left their jobs, driven by the pursuit of better opportunities and work-life balance. Currently, the job change rate is just above pre-pandemic levels, with only 26% of Bank of America customers changing jobs since its peak in 2022. Economists suggest that factors such as tariffs and general business uncertainty are contributing to this trend, as workers express concerns about the future of the labor market.

WJZ - CBS BaltimoreKPI – August 2025: State of the EconomyGreater Cleveland’s Job Market and Population Trends Signal a Region on the RiseFewer entry-level jobs push new grads toward flexible workSkills gaps fuel costly hiring mistakes

As job switching has declined, so too have the associated pay increases. The median raise for workers who changed employers fell to 7% in July 2025, down from 20% in 2022 and 10% in 2019. This shift reflects a changing power dynamic in the labor market, where workers had more leverage during the pandemic but are now facing a more employer-favorable environment. Federal Reserve data indicates that wage growth for job hoppers has equaled that of job stayers for the first time since 2010, further underscoring the cooling labor market.

WJZ - CBS BaltimoreKPI – August 2025: State of the EconomyGreater Cleveland’s Job Market and Population Trends Signal a Region on the RiseSkills gaps fuel costly hiring mistakesFewer entry-level jobs push new grads toward flexible work

The broader economic landscape is also showing signs of uncertainty. The U.S. Bureau of Labor Statistics reported a modest increase in the Consumer Price Index and a stagnant job market, with nonfarm payroll employment remaining relatively unchanged in July. The unemployment rate edged up to 4.2%, with a notable decline in job openings. Analysts attribute this stagnation to ongoing trade policy uncertainties, including the impact of tariffs on inflation and consumer prices. Ellen Zentner, chief economic strategist for Morgan Stanley Wealth Management, noted that the labor market, once robust, is now exhibiting signs of strain.

KPI – August 2025: State of the Economy

In the industrial sector, a skills shortage has led to rushed hiring practices, with 73% of hiring professionals feeling pressured to fill positions quickly. This urgency has resulted in increased safety incidents and decreased productivity, as organizations prioritize speed over quality in their hiring processes. Trevor McGlochlin from Talogy emphasized the importance of hiring for quality and skill readiness, particularly in sectors where employee performance directly impacts safety and efficiency.

Skills gaps fuel costly hiring mistakesKPI – August 2025: State of the EconomyWJZ - CBS BaltimoreFewer entry-level jobs push new grads toward flexible workGreater Cleveland’s Job Market and Population Trends Signal a Region on the Rise

• “People are not leaving their jobs right now because they're nervous about the future of the labor market,” — Allison Shrivastava, Economist at Indeed

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• “This trend confirms that the labor market is no longer as tight,” — Taylor Bowley, Economist at Bank of America Institute

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• “However, this research reveals that prioritizing speed of hire over quality can be hugely detrimental.” — Trevor McGlochlin, Talogy Consultant

Skills gaps fuel costly hiring mistakes

The current labor market dynamics suggest a shift towards greater job stability, with workers hesitant to leave their positions amid economic uncertainty. As employers navigate these challenges, the implications for consumer spending and overall economic growth remain to be seen. The upcoming jobs report from the Labor Department on September 5 will provide further insights into these trends.

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