by Timothy McQuiston, Vermont Business Magazine Vermont weekly unemployment claims for the week ending August 16, 2025, fell slightly and remained within their seasonal norms, after a spike in manufacturing layoffs three weeks ago. New claims were 240 last week, down 38 claims from the week before and up 52 from last year at this time. Claims, which tend to be lowest in the summer, were 181 at the end of September 2024.
In Vermont for the weekly report, manufacturing accounted for 15% of the total (about 61 claims), down 7% from the previous week. Manufacturing overall has become a smaller part of the Vermont economy over the last 25 years and that trend appears to be continuing. The Service industry, which typically accounts for the most claims, last week reported 45% from the previous week, up 1 point. Construction was 6%, up 2 points.
For the week, Vermont total unemployment insurance claims were 2,612 (down 290 for the week and up 310 from this time last year).
The Vermont Unemployment Trust Fund is well capitalized. As of the most recent data, there was $331 million in the Trust Fund (as claims are paid out on one side, employers are contributing to the fund on the other). The pre-pandemic Trust Fund balance on March 1, 2020, was $506.2 million.
For the nation, according to the US DOL, the advance figure for seasonally adjusted initial claims was 235,000, an increase of 11,000 from the previous week's unrevised level of 224,000. The 4-week moving average was 226,250, an increase of 4,500 from the previous week's unrevised average of 221,750.
Markets
Meanwhile, the stock market had a positive week at the end as Fed Chair Jerome Powell reinforced the general assumption that the Fed would lower rates modestly in September. Shares fell steeply earlier in the week after several indicators suggested a slowing economy, including lower retail sales at Walmart and after a lackluster July jobs report (see below). But shares shot up after Powell's comments, with new highs for the S&P and NASDAQ, and included the Dow, which had languished below its historic peak from last December.
Wall Street has expected the Fed will cut interest rates early in September, probably by 25 basis points (0.25%). Investors were hoping for 50 basis points, but the wholesale inflation rate came in higher than expected. Powell also hinted in his speech today (August 22) that overall economic conditions allow the Fed to "proceed carefully" with fiscal policy as downside risks mount.
The divided Fed on July 30 declined to cut interest rates, infuriating the White House and depressing the stock market. The Fed is in a difficult position. On the one hand the economy appears to be stalling, in large part because of tariff uncertainty, and on the other hand, inflation is pushing up for apparently the same reason. The Fed raised rates starting in 2022 in order to stifle spiking inflation, but at a time when federal stimulus funds and a general economic recovery was also occurring. Now, they must decide on whether to risk more inflation by cutting rates at a time of a weakening economy, which could lead to stagflation.
The S&P, Dow and NASDAQ all reached historic peaks August 22. At close Friday, the S&P finished at 6,466.91 up 96.74 (1.52%); the Dow was 45,631.74 up 846.24 (1.89%) and the NASDAQ was 21,496.535 up 396.223 (1.88%).
Meanwhile, homes sales fell in June across the US as interest rates stayed around 6.5% and markets softened as homes-for-sale lingered on the market, except in the Northeast, where sales are up 2% despite strong price growth.
US Labor Report: July
Total nonfarm payroll employment changed little in July (+73,000) and has shown little change since April, the U.S. Bureau of Labor Statistics (BLS) reported August 1. The unemployment rate, at 4.2 percent, also changed little in July. Employment continued to trend up in health care and in social assistance. Federal government continued to lose jobs.
This report presents statistics from two monthly surveys. The household survey measures labor force status, including unemployment, by demographic characteristics. The establishment survey measures nonfarm employment, hours, and earnings by industry. For more information about the concepts and statistical methodology used in these two surveys, see the Technical Note.
Household Survey Data
Both the unemployment rate, at 4.2 percent, and the number of unemployed people, at 7.2 million, changed little in July. The unemployment rate has remained in a narrow range of 4.0 percent to 4.2 percent since May 2024. (See table A-1.)
Among the major worker groups, the unemployment rates for adult men (4.0 percent), adult women (3.7 percent), teenagers (15.2 percent), Whites (3.7 percent), Blacks (7.2 percent), Asians (3.9 percent), and Hispanics (5.0 percent) showed little change in July. (See tables A-1, A-2, and A-3.)
Among the unemployed, the number of new entrants increased by 275,000 in July to 985,000. New entrants are unemployed people who are looking for their first job. (See table A-11.)
In July, the number of long-term unemployed (those jobless for 27 weeks or more) increased by 179,000 to 1.8 million. The long-term unemployed accounted for 24.9 percent of all unemployed people. (See table A-12.)
The labor force participation rate, at 62.2 percent, changed little in July but has declined by 0.5 percentage point over the year. The employment-population ratio, at 59.6 percent, also changed little over the month but was down by 0.4 percentage point over the year. (See table A-1.)
The number of people employed part time for economic reasons, at 4.7 million, changed little in July. These individuals would have preferred full-time employment but were working part time because their hours had been reduced or they were unable to find full-time jobs. (See table A-8.)
The number of people not in the labor force who currently want a job changed little in July at 6.2 million but was up by 568,000 over the year. These individuals were not counted as unemployed because they were not actively looking for work during the 4 weeks preceding the survey or were unavailable to take a job. (See table A-1.)
Among those not in the labor force who wanted a job, the number of people marginally attached to the labor force changed little at 1.7 million in July. These individuals wanted and were available for work and had looked for a job sometime in the prior 12 months but had not looked for work in the 4 weeks preceding the survey. The number of discouraged workers decreased by 212,000 in July to 425,000, largely offsetting an increase in the prior month. Discouraged workers are a subset of the marginally attached who believed that no jobs were available for them. (See Summary table A.)
Establishment Survey Data
Total nonfarm payroll employment changed little in July (+73,000) and has shown little change since April. Over the month, employment continued to trend up in health care and in social assistance. Federal government continued to lose jobs. (See table B-1.)
In July, health care added 55,000 jobs, above the average monthly gain of 42,000 over the prior 12 months. Over the month, job gains occurred in ambulatory health care services (+34,000) and hospitals (+16,000).
Social assistance employment continued to trend up in July (+18,000), reflecting continued job growth in individual and family services (+21,000).
Federal government employment continued to decline in July (-12,000) and is down by 84,000 since reaching a peak in January. (Employees on paid leave or receiving ongoing severance pay are counted as employed in the establishment survey.)
Employment showed little change over the month in other major industries, including mining, quarrying, and oil and gas extraction; construction; manufacturing; wholesale trade; retail trade; transportation and warehousing; information; financial activities; professional and business services; leisure and hospitality; and other services.
Average hourly earnings for all employees on private nonfarm payrolls rose by 12 cents, or 0.3 percent, to $36.44 in July. Over the past 12 months, average hourly earnings have increased by 3.9 percent. In July, average hourly earnings of private-sector production and nonsupervisory employees rose by 8 cents, or 0.3 percent, to $31.34. (See tables B-3 and B-8.)
The average workweek for all employees on private nonfarm payrolls edged up by 0.1 hour to 34.3 hours in July. In manufacturing, the average workweek held at 40.1 hours, and overtime edged down to 2.8 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls edged up by 0.1 hour to 33.7 hours in July. (See tables B-2 and B-7.)
Revisions for May and June were larger than normal. The change in total nonfarm payroll employment for May was revised down by 125,000, from +144,000 to +19,000, and the change for June was revised down by 133,000, from +147,000 to +14,000. With these revisions, employment in May and June combined is 258,000 lower than previously reported. (Monthly revisions result from additional reports received from businesses and government agencies since the last published estimates and from the recalculation of seasonal factors.)
Vermont’s unemployment rate unchanged at 2.6 percent in July
The Vermont Department of Labor reported on August 19 that the seasonally adjusted statewide unemployment rate for July was 2.6 percent. This reflects no change from the prior month’s revised estimate. The civilian labor force participation rate was 64.7 percent in July, a decrease of two-tenths of one percentage point from the prior month’s revised estimate. Vermont has the third lowest rate in the nation, behind South (1.9%) and North Dakota (2.5%). California has the highest rate at 5.5% (Washington, DC, is at 6%).
The Labor Force and Employment dropped from June and are both now more the 3,000 below their numbers from last year. Because the Labor Force is the denominator in these equations, a decline in both data points can offset a change in the rate. The number of unemployed fell slightly by 74 participants.
The comparable United States rate in July was 4.2 percent, an increase of one-tenth of one percentage point from the revised June estimate. The seasonally adjusted Vermont data for July show the Vermont civilian labor force decreased by 939 from the prior month’s revised estimate (see Table 1). The number of employed persons decreased by 865 and the number of unemployed persons decreased by 74. The change in the labor force participation rate (64.7 percent, down two-tenths of one percentage point) was statistically significant in the seasonally adjusted series.
The July unemployment rates for Vermont’s 14 counties ranged from 2.2 percent in Windsor County to 2.9 percent in Orleans County (note: county unemployment rates are not seasonally adjusted). For comparison, the July unadjusted unemployment rate for Vermont was 2.5 percent, an increase of one-tenth of one percentage point from the revised unadjusted June level and an increase of two-tenths of one percentage point from a year ago.
The seasonally adjusted data for July reported an increase of 100 jobs from the revised June data. There was a decrease of 100 jobs between the preliminary and the revised June estimates due to the inclusion of more data. The seasonally adjusted over-the-month changes in July varied at the industry level. The industries with a notable increase were: Administrative & Waste Services (+500 jobs or +3.5%) and Finance & Insurance (+300 jobs or +3.5%). The industries with a notable decrease were: Federal Government (-200 jobs or -2.9%), Other Services (-300 jobs or -2.8%), and Professional & Technical Services (-300 jobs or -1.7%).
The preliminary ‘not-seasonally-adjusted’ jobs estimates for July showed a decrease of 600 jobs when compared to the revised June numbers. As with the seasonally adjusted data, this over-the-month change is from the revised June numbers which experienced a decrease of 400 jobs from the preliminary estimates. The broader economic picture can be seen by focusing on the over-the-year changes in this data series. As detailed in the preliminary not-seasonally-adjusted July data, Total Private industries increased by 3,400 jobs (+1.3%) over the year and Government (including public education) employment increased by 500 jobs (+1.0%) in the past year.
*** BLS note on LAUS geography and data changes in 2025: https://www.bls.gov/lau/geography-and-data-changes-in-2025.htm ***
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