‘The eye of the hurricane’: Why the U.S. job market has soured, economists say – CNBC

U.S. Labor Market Performance and its Implications for Sustainable Development Goal 8

Recent federal data indicates a significant weakening of the U.S. job market, posing direct challenges to the achievement of Sustainable Development Goal 8 (SDG 8), which promotes sustained, inclusive, and sustainable economic growth, full and productive employment, and decent work for all. The reported slowdown suggests the economy is failing to generate sufficient employment opportunities to keep pace with population growth, a core tenet of SDG 8.

Analysis of Recent Employment Data

The Bureau of Labor Statistics (BLS) reported figures that fall short of economic stability and growth targets. This performance directly impacts progress towards Target 8.5 of the SDGs, which aims for full and productive employment.

• July Job Creation: Employers added only 73,000 jobs, a figure below the estimated 80,000 to 100,000 jobs required monthly to accommodate population growth.
• Downward Revisions: Job growth figures for previous months were revised sharply downward, indicating a more severe slowdown than initially reported.
  • May’s job growth was revised from 144,000 to 19,000.
  • June’s job growth was revised from 147,000 to 14,000.
• Three-Month Average: Job growth has averaged just 35,000 over the past three months, a stark contrast to the 111,000 monthly average in the first quarter of 2025.

These statistics signal a contracting job market, undermining the economic growth necessary to support the 2030 Agenda for Sustainable Development.

Key Challenges to Achieving Full and Productive Employment

Several economic and policy factors are creating headwinds that impede progress on SDG 8 and related goals, such as SDG 1 (No Poverty) and SDG 10 (Reduced Inequalities).

Economic and Policy Headwinds

The current economic environment is characterized by uncertainty and policies that hinder broad-based, inclusive growth.

1. Tariffs and Trade Policy: The implementation of new tariffs creates business uncertainty, discouraging investment and hiring. This approach runs counter to SDG 17 (Partnerships for the Goals), which emphasizes a universal, rules-based, and equitable multilateral trading system. The resulting economic pressure on businesses directly impacts their capacity to provide decent work (SDG 8).
2. Immigration Policy: Restrictive immigration policies have reportedly reduced the available workforce, contributing to a fall in the labor force participation rate. This affects the inclusive principles of SDG 8 and exacerbates challenges related to SDG 10 by potentially marginalizing migrant populations.
3. Sectoral Concentration of Growth: Job creation has been largely concentrated in the health care and social assistance sectors. This lack of broad-based opportunity across the economy fails to promote the inclusive growth envisioned by SDG 8 and can widen inequalities between different labor segments (SDG 10).

Labor Market Stagnation and Social Impact

Beyond weak job creation, other indicators point to a stagnant labor market with significant social consequences, threatening progress on poverty reduction and social equity.

• Rising Unemployment: The national unemployment rate rose to 4.2% in July.
• Increased Long-Term Unemployment: The share of individuals unemployed for more than six months has increased to nearly 25%. This trend is a critical concern for SDG 1, as long-term unemployment is a primary driver of poverty and social exclusion.
• Declining Labor Force Participation: The labor force participation rate fell to its lowest level since 2022, signaling that a growing number of individuals are disengaging from the job market, a negative indicator for achieving full and productive employment (SDG 8).
• Low Labor Mobility: While layoffs remain low, the rates of hiring and voluntary quits are also low. This “high degree of stagnation” limits opportunities for workers to find better jobs and improve their economic standing, thereby hindering the “decent work” aspect of SDG 8.

Conclusion: A Setback for Sustainable Development Goals

The current state of the U.S. job market, characterized by weak job creation, rising long-term unemployment, and policy-driven uncertainty, represents a significant setback for the nation’s progress towards key Sustainable Development Goals. The data reflects a failure to foster the inclusive and sustainable economic growth required by SDG 8. The associated social impacts, including risks of increased poverty and inequality, underscore the urgent need for policy adjustments that align with the principles of decent work for all and shared prosperity.

Which SDGs are addressed or connected to the issues highlighted in the article?

SDG 8: Decent Work and Economic Growth

• The entire article focuses on the health of the U.S. job market, which is the central theme of SDG 8. It discusses key aspects such as job creation, unemployment rates, labor force participation, and economic headwinds affecting employment. The article’s main point, that the job market is “showing signs of a gradual weakening” and has “hit a long-awaited wall,” directly relates to the goal of promoting sustained, inclusive, and sustainable economic growth, full and productive employment, and decent work for all.

What specific targets under those SDGs can be identified based on the article’s content?

Target 8.1: Sustain per capita economic growth in accordance with national circumstances and, in particular, at least 7 per cent gross domestic product growth per annum in the least developed countries.

• The article suggests a contraction in economic growth relative to population needs. It states that the economy needs to add “roughly 80,000 to 100,000 jobs per month to keep up with population growth.” With only 73,000 jobs added in July, the analysis concludes the “job market isn’t keeping pace with population growth — and is therefore contracting,” which directly relates to the goal of sustaining economic growth.

Target 8.5: By 2030, achieve full and productive employment and decent work for all women and men, including for young people and persons with disabilities, and equal pay for work of equal value.

• This target is central to the article. The discussion revolves around the failure to achieve full employment, highlighted by “very weak job numbers,” a rising unemployment rate (to 4.2%), and an increasing share of long-term unemployed individuals (nearly 25%). The article also points to a “high degree of stagnation” with low hiring, which creates significant “challenges for job seekers,” indicating a move away from, rather than towards, full and productive employment.

Target 8.3: Promote development-oriented policies that support productive activities, decent job creation, entrepreneurship, creativity and innovation…

• The article identifies several policy-related “headwinds” that are negatively impacting job creation. These include “tariffs,” which “creates uncertainty for businesses, leading many to pull back on hiring,” as well as “immigration policy that has reduced the amount of available workers,” and “higher interest rates.” This directly connects to the role of policy in either supporting or hindering the creation of decent jobs.

Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

Indicator: Unemployment Rate (Relates to Indicator 8.5.2)

• The article explicitly provides data for this indicator. It reports, “The unemployment rate also rose to 4.2% in July, up from 4.1% in June.” This is a direct measure used to track progress towards Target 8.5 (full employment).

Indicator: Employment Growth

• The article is built around this indicator, providing specific figures like “Employers added just 73,000 jobs in July” and noting that “Job growth has averaged 35,000 in the past three months.” This metric is fundamental to assessing whether an economy is creating enough jobs for its population, a key aspect of Target 8.1 and Target 8.5.

Indicator: Labor Force Participation Rate

• This indicator is directly mentioned as a point of concern. The article states that “the labor force participation rate fell to its lowest level since 2022.” This metric is crucial for understanding the size of the active workforce and diagnosing issues in the labor market, relevant to Target 8.5.

Indicator: Proportion of Long-Term Unemployed

• The article provides a specific statistic for this indicator, noting that “The share of unemployed Americans who are long-term unemployed — meaning they’ve been out of work for more than six months — has increased to nearly 25% from 21.6% since July 2024.” This indicator measures the severity of unemployment and the challenges faced by job seekers, providing a deeper insight into the quality of the employment situation under Target 8.5.

Summary of Findings

Source: cnbc.com