Unemployment rate in the US inched upward slightly, now standing at 4.2%
In a positive development for the U.S. labor market, the healthcare and social assistance sectors continued their job growth trajectory in July 2025. These sectors accounted for about 88% of total private sector job growth that month, underscoring their significant role in the economy.
The healthcare sector saw a significant increase, with a net addition of 55,400 jobs. Ambulatory healthcare services expanded by 33,600 jobs, driven by growth in home health care, dental offices, and physicians’ offices. Hospitals also hired 16,000 new workers, with positions in nursing and residential care facilities, skilled nursing care, and mental health and substance use-related residential facilities seeing an uptick.
The social assistance sector also experienced growth, adding 17,900 new positions, primarily in individual and family services.
While these sectors have shown robust employment growth, the broader labor market signaled a slowdown. Job gains for May and June were revised downward, and labor force growth has been partly attributed to reduced immigration. Some evidence suggests a labor market slackening beneath headline payroll numbers.
Despite these uncertainties, economic analysis indicates that health care spending drives a large share of household services consumption growth, which supports continued employment gains in these sectors. However, some economic forecasters caution that healthcare and social assistance employment growth may face headwinds, making future rapid growth less likely, though a collapse in jobs is not expected.
Outside of agriculture, approximately 73,000 new jobs were created in July. The unemployment rate remained steady at 4.2 percent, with 7.2 million unemployed individuals. The number of long-term unemployed stood at 1.8 million.
Interestingly, while the healthcare and social assistance sectors showed job growth, the federal government experienced a decrease in employment in July.
Overall, the healthcare and social assistance sectors remain the primary engines of U.S. job growth in 2025, reflecting demographic trends and policy-driven spending on health services. However, economic uncertainties could moderate this trend in the near term.
- The unexpected drop in employment within the federal government in July might have implications for policy-and-legislation, particularly in areas related to healthcare and social assistance, given their significant role in the economy.
- The general-news regarding the job market slackening beneath headline payroll numbers could affect political discussions about healthcare and social assistance, as economic forecasters predict potential headwinds for their employment growth in the future.
