The pillars supporting the US job market are showing cracks, with three key indicators warning of recession risks. Are job seekers facing an approaching winter?

Federal Reserve Chairman Powell unusually opened the door to interest rate cuts last Friday, marking the first time in nearly a year. He noted that a major pillar of the US economy—the labor market—is beginning to show signs of weakness.

Earlier this month, data released by the US government revealed that hiring pace slowed dramatically in July, while job growth in May and June proved much weaker than previously anticipated, intensifying concerns about employment growth momentum. The disappointing figures were sufficient to prompt President Trump to question their accuracy and dismiss the head of the agency responsible for compiling the data.

However, labor experts tell CBS News they are not surprised by this decline and warn that job seekers may face additional difficulties ahead. They indicate that since the August 1st employment data release, there have been signs that companies are delaying hiring as they adjust their strategies to address adverse factors such as new US tariffs and the emergence of artificial intelligence.

Andy Challenger, Senior Vice President at executive recruiting firm Challenger, Gray & Christmas, told CBS: "The labor market is indeed cooling down. We've also had one-on-one communications with many companies, and they've told us there may be layoffs in the future."

He added: "Therefore, in my view, there are more reasons to be pessimistic about the labor market rather than optimistic that we'll see some significant rebound."

Here are three charts that may signal a severe downturn in the US job market.

**Fewer Workers Being Hired**

Overall, compared to recent years when the economy rebounded strongly from the pandemic and businesses sought expansion, US employers are adding fewer jobs monthly in 2025. Powell stated last Friday that in 2024, employers hired an average of 168,000 employees per month, but over the past three months, this figure has slowed to an average of 35,000 per month.

The labor market is cooling down.

Powell said the labor market could weaken from here, potentially leading to "sharp increases in layoffs and rising unemployment rates."

This slowdown may prompt the Federal Reserve to cut its benchmark interest rate for the first time since December 2024 at next month's meeting, which is policymakers' primary tool for stimulating economic and employment growth. Lowering interest rates can boost the labor market by reducing borrowing costs for consumers, thereby driving spending, and by reducing investment costs for businesses, including adding employees.

**Long-term Job Seekers Are Increasing**

Another concerning sign is the recent surge in long-term job seekers—those who have been searching for work for more than 27 weeks. In July, approximately 1.8 million Americans had been seeking employment for over 27 weeks, representing about a 64% increase from three years ago and a 20% increase from one year ago.

Challenger stated that given signs that employers intend to continue layoffs, finding employment may not become easier anytime soon.

Long-term job seekers are increasing.

He advises job seekers to "not interrupt their job search during the summer" and believes "it's hard to imagine the labor market improving over the next three to six months."

**Young Unemployed Workers Surge**

Meanwhile, young workers are finding it increasingly difficult to secure their first jobs. The causes are attributed to various factors, from this year's economic slowdown to employers replacing entry-level employees with artificial intelligence.

Certainly, the US unemployment rate remains low at 4.2%. However, this data is lagging, reflecting the strong labor market conditions of previous months while providing little indication of future economic conditions.

Young workers are encountering difficulties in job searching.

Career coach Tracey Newell describes the current job market as "a perfect storm" for recent college graduates.

She added: "Companies are restricting new entry-level positions, while artificial intelligence is replacing many traditional 'junior' jobs." She also noted that it's not uncommon nowadays for employers to receive hundreds of job applications for a single position.