Last month, businesses added 74,000 new jobs, an anemic number compared with previous months. Private-sector job growth fell to the lowest level since October 2024. Of the 147,000 total new jobs added in June, nearly half were in government, bolstered by a jump in state and local government jobs.

On top of that, more than half of private industries cut jobs in June, Labor Department data indicates—only the third time this has happened since April 2020. For most of the postpandemic period, the majority of industries were adding jobs.

Companies across the economy have plans to trim head count in the coming months. In June, Procter & Gamble announced it would cut 7,000 jobs—or 15% of its nonmanufacturing workforce—to create “broader roles and smaller teams.” Microsoft said this past week that it plans to cut 9,000 workers, after eliminating 6,000 roles across its product and software development teams in May.

On Thursday, United Parcel Service said it planned to offer buyouts to its delivery drivers for the first time in its 117-year history. UPS decided to offer the buyouts because the company is navigating “an unprecedented business landscape” and reorganizing its network, a company spokesman said.

Manufacturing employment fell in June for the second straight month, data from the Labor Department shows. The drop was particularly noticeable, Kolko said, in high-wage manufacturing sectors such as semiconductors and machinery, which did well in recent years.

“At large, we’re not really looking to grow our head count very dramatically,” Adobe Chief Executive Shantanu Narayen told investors last month. “We are finding a lot more efficiency. People are using AI to be more efficient within the enterprise.”

Employers say they are seeing more applicants for every job opening, and they sense a new level of anxiety among job seekers.

“There’s just a fear and desperation in the candidate population that I haven’t seen in a very, very long time,” said Tom Lott, the head of talent acquisition at Berry Appleman & Leiden, a law firm in the Dallas area.