U.S. Job Market Warning Signs Grow Beneath the Surface

Source: Coindoo Original Title: U.S. Job Market Warning Signs Grow Beneath the Surface Original Link: The United States labor market is showing mounting signs of stress, even as headline employment figures continue to suggest stability.

A closer look at where jobs are actually being created reveals a far weaker picture beneath the surface.

Key Takeaways

• Job losses outside healthcare are the largest since the pandemic, despite modest overall payroll gains.
• Nearly all private-sector job growth in 2025 came from healthcare and social assistance.
• Such narrow employment growth has historically been associated with recessionary periods.

Over the past four months, nonfarm payrolls excluding healthcare and social assistance have declined by 164,000. This represents the sharpest contraction outside those sectors since the 2020 pandemic shock. While total payrolls still posted a small gain of 41,000 over the same period, that growth is narrowly concentrated and masks broader job losses elsewhere in the economy.

A Pattern Usually Seen Before Recessions

In past economic cycles, this kind of divergence between headline job growth and underlying weakness has rarely occurred outside of recessions. Most cyclical and productivity-driven industries are no longer contributing meaningfully to employment gains, signaling that labor market momentum is fading even without an official downturn.

The slowdown is especially striking when compared with conditions earlier in 2025. At the start of the year, comparable payroll data showed gains of around 500,000 jobs. Since then, hiring outside healthcare-related fields has nearly stalled, pointing to a rapid deterioration in labor market breadth.

Healthcare Now Carries the Job Market

Healthcare and social assistance have become the primary engines of employment growth. Of the 733,000 private-sector jobs added in 2025, roughly 713,000 came from these two sectors alone. That leaves just 20,000 net jobs created across the rest of the economy, including manufacturing, construction, and other cyclical industries.

This growing reliance on healthcare suggests job creation is being driven more by demographic trends and structural demand than by economic expansion. As a result, the labor market appears increasingly fragile, with risks building beneath seemingly stable headline numbers.