Need to Know Briefing | September 8, 2025: Job Growth Stalls, AI Shakes Up Hiring

The U.S. labor market is sending mixed signals this week: job growth slowed dramatically in August, job seekers now outnumber available openings, and optimism about the future has fallen to record lows. In the meantime, new workforce research is shedding light on how hiring practices - from application processes to the use of AI tools - are influencing both employers and job seekers. 

Every Monday, Kelly's Need to Know Briefing curates the week's most important workforce and hiring insights - giving HR leaders and hiring manager the data and context to make smarter decisions.

Labor market headlines

• Job growth stalls. The U.S. added just 22,000 jobs in August, far below the 75,000 expected. Unemployment rose slightly to 4.3%, while manufacturing and wholesale trade each shed 12,000 jobs.
• Job seekers outnumber openings. For the first time since 2021, there are more unemployed Americans (7.2 million) than job openings (7.18 million). Economists call this a turning point for the labor market.
• Record-low optimism. Just 25% of Americans believe they can improve their standard of living, the lowest since 1987, according to the WSJ-NORC poll

Recruiting & retention trends

• Application drop-off. More than half of job seekers say they’ve quit an application before finishing due to long or confusing processes.
• Appearance bias. Over half of hiring managers admit physical features influence their decisions, with some prioritizing attractiveness over qualifications.
• Flexible hours shift. More workplaces now accept early departures (e.g., 4 p.m. pickups), reflecting new post-pandemic norms — though arriving late is still frowned upon.

Technology & AI shifts

• Distrust in AI recruiting. 68% of tech workers say they distrust fully AI-driven hiring, believing it overlooks qualified candidates.
• AI-led interviews outperform humans. In a University of Chicago study of 67,000 interviews, AI voice agents led to 12% more job offers and a 17% higher retention rate in the first month.
• AI in action. Salesforce, DHS, and Apple are expanding AI’s role, from reducing support staff to creating “AI Corps” in government and testing employee-facing chatbots.

Dive deeper into the full interactive edition of this week's Need to Know Briefing:

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