The Impact of a Cooling U.S. Jobs Market on Cyclical Sectors and Investment Strategy
The U.S. labor market is undergoing a marked shift, with job openings falling to 7.18 million in July 2025—a 25-year low since the end of 2020—and the ratio of job openings to unemployed Americans dropping below 1 for the first time since 2018 [1]. This cooling trend, coupled with a modest 73,000 nonfarm payroll addition in July (well below the 110,000 forecast), signals a labor market grappling with wage stagnation, trade uncertainties, and revised employment figures that now show a combined loss of 258,000 jobs in May and June [4][6]. For investors, these developments underscore the need to reassess portfolio allocations, particularly in cyclical sectors, while capitalizing on the relative resilience of defensive equities and…
