The number of unemployed Americans now outnumbers available job openings. Data from July show 7.24 million unemployed Americans compared to 7.18 million job openings, marking the first time that the unemployed have outnumbered the number of available jobs since April 2021.
This is precisely what we see during stagflation and a structural labor shift. Companies are cutting costs due to regulations, taxation, and inflation that have never meaningfully waned since the pandemic. AI automation has replaced countless positions, and when companies do choose to hire, they are often seeking new hires from outside the US, where the cost of labor is cheaper.
The fact that job openings are now falling below the number of unemployed is a warning that we are entering the next phase of the economic decline into 2026. Just as the ECM has forecast, confidence is shifting. Employers are reluctant to expand, workers are squeezed by inflation and the cost of living, and the political response will be more regulation, higher taxes, and demands for wage hikes that only accelerate the cycle downward.
Around 60% of recent college graduates cannot find employment. Entry-level jobs are being replaced by AI or outsourced overseas and the unemployment rate for those aged 20 to 29 is 7.1% compared to the national average of 4.3%. Previously, college graduates had lower unemployment rates than the national average, as those inexperienced employees were the cheap labor that companies were seeking.
Stagflation is the combination of rising prices with a stagnant or declining economy. Here, you have unemployment rising as job openings vanish, while at the same time, food, insurance, shelter, and taxation continue to rise. People are struggling to make ends meet. The central bank and politicians are reluctant to use the word “stagflation,” as everyone wants the public to believe that the economy is growing rather than stagnating.