Job cuts soared in August, offering the latest evidence of a slowdown in the labor market as some economists warn of a possible recession, according to data released on Thursday by outplacement firm Challenger, Gray and Christmas (CGC).
U.S. companies announced nearly 86,000 jobs cuts in August, which amounted to a 39% increase from the previous month, CGC said. The figure indicated the largest number of job cuts in the month of August since 2020, which coincided with the onset of the COVID-19 pandemic.
August marks the sixth time this year that total job cuts surpassed those of the corresponding month one year prior, CGC said.
“After the impact of DOGE on the Federal Government, employers are citing economic and market factors as the driver of layoffs,” said Andrew Challenger, senior vice president and labor expert for CGC.
The pharmaceuticals and finance industries suffered the largest number of job cuts last month, the data showed.
The job cuts figures come a day before the release of a new government jobs report, which is expected to show 75,000 jobs added in August. If the report meets expectations, it would mark a slight uptick from 73,000 jobs added in the previous month.
Overall, government jobs data indicated a sharp slowdown in hiring over the summer. The U.S. added an average of about 35,000 jobs over three months ending in July, which marked a major cooldown from the roughly 196,000 jobs added on average over the previous three-month period, U.S. Bureau of Labor Statistics data showed.
The hiring cooldown hit a wide swath of industries, including manufacturing and the federal government. The overall unemployment rate of 4.2% continued to hover near a historically low level but unemployment rose among Black workers, an occurrence that can sometimes foretell job losses among other groups.
Meanwhile, economic growth slowed over the first half of this year. A government report on gross domestic product indicated average annualized growth of 1.2% over the first half of 2025, well below 2.5% growth last year.
While acknowledging the tepid numbers, some analysts previously told ABC News that warnings about a recession are premature.
Construction workers build a home at a new housing development on July 01, 2025 in Richmond, California.
Justin Sullivan/Getty Images
The economy has so far largely avoided the type of widespread job losses that often accompany a recession. Consumer spending, which accounts for about two-thirds of economic activity, ticked higher over three months ending in June, and corporate earnings have remained robust.
Hours after the release of the weak jobs report last month, President Donald Trump fired BLS Commissioner Erika McEntarfer, a Joe Biden appointee who was confirmed by a bipartisan Senate vote in 2024.
In a social media post, Trump volleyed sharp criticism at McEntarfer, claiming without evidence that the jobs data had been “manipulated.” The jobs report featured revisions of previous months’ data, which is a routine practice.
“We need accurate Jobs Numbers. I have directed my Team to fire this Biden Political Appointee, IMMEDIATELY. She will be replaced with someone much more competent and qualified,” Trump said on Friday.
McEntarfer had served in the federal government for two decades prior to her firing.
“It has been the honor of my life to serve as Commissioner of BLS alongside the many dedicated civil servants tasked with measuring a vast and dynamic economy,” McEntarfer said in a social media post after her dismissal. “It is vital and important work and I thank them for their service to this nation.”
William Beach, a former commissioner of the Bureau of Labor Statistics, who was appointed by Trump, condemned McEntarfer’s dismissal.
“The totally groundless firing of Dr. Erika McEntarfer, my successor as Commissioner of Labor Statistics at BLS, sets a dangerous precedent and undermines the statistical mission of the Bureau,” Beach posted on X.
McEntarfer did not respond to an earlier ABC News request for comment.
As a replacement for McEntarfer, Trump nominated E.J. Antoni, chief economist at the conservative-leaning Heritage Foundation.
