Stable labor market in 2025

July 22, 2026

The annual average job openings rate declined to 4.3% in 2025 from 4.6% in 2024. It was even higher, 6.8%, in 2022, at the peak of the post-pandemic period.

The annual average job openings rate increased in only three states in 2025 from 2024: Georgia, Michigan and Ohio. The declines in other states and Washington, DC show slight cooling in the labor market over 2025.

That is according to the federal government’s state-level Job Openings and Labor Turnover Survey (JOLTS). Note: the state-level JOLTS is now released annually instead of monthly.

Real-time data from Indeed show that job postings have been flat at the national level since last October. Labor demand has diverged in the five largest states. Since October 2025, job postings have risen in Texas, flattened in California and fallen in Florida, Pennsylvania and New York. Recent momentum in Florida and Pennsylvania could show up as more job openings.

The ratio of openings to unemployed job seekers, a measure of balance in the labor market tracked closely by Federal Reserve officials, stayed flat at 1.0 for the second straight month and since a year ago. The ratio increased in only four states in December 2025 for the year: Louisiana, Michigan, Ohio and Tennessee. Overall, the labor market cooled across the country in late 2025 but has strengthened in 2026.

Hires, quits and layoffs were little changed at the national level for 2025 compared to 2024. In California, hires and layoffs rose; quits remained flat. Both hiring and quits fell while layoffs were flat in Texas. In New York, all three categories rose.

Overall, the defining characteristic of the labor market over the past 18 months has been slower churn. Hires, quits and layoffs remain relatively low. Low hiring rates in the early 2010s overlapped with a much higher unemployment rate of close to 7%.

At the national level, the unemployment rate ticked down to 4.2 in June from 4.3 in May. Twenty states reported statistically significant changes in unemployment compared to one year ago. More than a dozen states posted increases (the largest was 1.3 percentage points in Connecticut and 1.0 point in Oklahoma) while seven states logged decreases; the largest drops occurred in Ohio and New Jersey.

We’ve seen warming in the first half of 2026.

Matthew Nestler

KPMG Senior Economist

The state-level JOLTS data show slight cooling but overall stable conditions across the labor market in 2025. We’ve seen warming in the first half of 2026. It is still difficult to find a new job, though relative stability has kept unemployment low and consumers spending.

The growing hawkish coalition at the Federal Reserve is worried about sticky inflation, especially on the services side. The resumption of open hostilities in the Middle East, along with higher gas prices, adds fuel to the inflation fire. We expect the Fed to raise interest rates two times later this year.