Why More U.S. Companies Are Pulling Back on Hiring

Summary

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WSJ What’s News

Episode: Why More U.S. Companies Are Pulling Back on Hiring

Date: August 21, 2025
Host: Sabrina Siddiqui

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Overview

This episode explores the growing trend of U.S. companies slowing or pausing hiring, investigating economic uncertainty, corporate caution, and the implications for the labor market in the second half of 2025. Additional headlines include a major court ruling impacting former President Trump, U.S. home sales data, and key movements in financial markets.

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Key Discussion Points & Insights

1. Court Overturns Trump $500 Million Penalty

(00:31–03:53)

• Sharply Divided Appeals Court Decision

  • An appeals court overturned a $500 million civil fraud judgment against former President Trump, providing temporary relief but leaving some business restrictions intact.
  • The ruling was complex and divided, with "more than 300 pages of the justices writing about the things they disagreed about." (Corinne Ramey, 01:42)
  • Letitia James, New York Attorney General, retained authority to bring the fraud case and some restrictions remain for Trump’s business operations.

• Political & Legal Reactions

  • Both Trump and James claimed partial victories:

    • Trump praised the "courage" of the ruling.
    • James emphasized the business restrictions and plans to appeal to the state's highest court.

  • “In the short term? It’s certainly good for Trump… in the long term, it remains to be seen.”
    — Corinne Ramey (03:34)

Memorable Quote:

"This was about as far from agreement as I've ever seen."
— Corinne Ramey, 01:42

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2. Surprise Rise in U.S. Home Sales

(04:02–06:41)

• Unexpected Uptick

  • Existing home sales rose 2% in July 2025, contrary to economists’ expectations of a drop.
  • Drivers include slightly lower mortgage rates and increased activity from investors and vacation home buyers.

• Ongoing Market Headwinds

  • “Home buying has been held back by really high prices for houses. Number one, we hit a record in price in June.”
    — Will Parker (05:10)
  • Prices remain historically high, with home values having risen "50% in some parts of the country."
  • Despite some improvement with inventory, affordability remains low due to the price-to-income ratio.

• Outlook

  • Markets might see modest improvement, but a "tremendous" rebound is not expected soon.
  • “The ratio of the cost of a home to people's income is not improved; it's just gotten worse over the last decade or so."
    — Will Parker (06:14)
  • Improvement hinges on further declines in mortgage rates.

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3. Markets & Economic Signals

(06:42–08:15)

• Stock Market Decline

  • Walmart's missed profit projections and warning on tariffs led to a market dip.
  • The Dow and Nasdaq each fell ~0.3%; S&P 500 marked its fifth consecutive day of decline, down 0.4%.

• Manufacturing & Inflation

  • U.S. manufacturing rebounded sharply, but price pressures are escalating.
  • Average selling prices rose at their fastest rate in three years, with tariffs cited as a key driver.

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4. Why U.S. Companies Are Pulling Back on Hiring

(08:45–11:23)

• Fresh Labor Market Data

  • Jobless claims increased to 235,000; continuing claims reached a high at 1.97 million.
  • 1 in 5 employers plan to slow hiring — “nearly double the rate of companies that anticipated bringing on fewer people at this time last year.”
    — Sabrina Siddiqui (08:45)
  • This cautious approach is the second year of such sentiment; optimism last peaked in early 2023.

• Business Sentiment: Rising Caution

  • "Companies are being more cautious. They're saying there's a lot of economic uncertainty out there, such as stop and start tariffs, so they're really taking a pause..."
    — Ray Smith (10:03)
  • Firms are shrinking workforces and pitching it as a pivot to greater productivity.
  • High-profile examples:
    • Novo Nordisk paused non-critical hiring;
    • Meta slowed its AI hiring spree.

• Wait-and-See Mentality

  • “Right now we’re still in sort of this wait and see environment."
    — Ray Smith (11:00)
  • Companies are hesitating on major hiring or expansion moves until economic signals (especially around tariffs) are clearer.

Memorable Quote:

“They’re framing it as this is a way they can be more productive with fewer employees... rather than it looking like they're being cautious and scared.”
— Ray Smith, 10:24

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5. Notable International and Political Updates

(11:27–12:31)

• Ukraine and Russia
  • President Trump suggested Ukraine needs to continue attacks on Russia to have any chance of victory. The White House framed this as an observation.
• Nord Stream Sabotage
  • An ex-Ukrainian military officer suspected of sabotaging the Nord Stream pipeline was arrested in Italy under a German warrant, in a development hailed as a major breakthrough.

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Timestamps for Key Segments

• Trump Civil Fraud Ruling Discussion: 00:31–03:53
• U.S. Home Sales Upswing: 04:02–06:41
• Market Movements & Economic Indicators: 06:42–08:15
• Job Market and Slowed Hiring Trends: 08:45–11:23
• International & Political Headlines: 11:27–12:31

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Notable Quotes

• “This was about as far from agreement as I've ever seen.” — Corinne Ramey (01:42)
• “Home prices have gone up 50% in some parts of the country over a span of five years or so.” — Will Parker (05:10)
• “Companies are being more cautious. They're saying there's a lot of economic uncertainty out there, such as stop and start tariffs...” — Ray Smith (10:03)
• “They're framing it as this is a way they can be more productive with fewer employees... rather than it looking like they're being cautious and scared.” — Ray Smith (10:24)
• “Right now we’re still in sort of this wait and see environment.” — Ray Smith (11:00)

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Summary/Tone

The episode blends concise financial news coverage with in-depth reporting and expert analysis. The tone is factual and brisk, relaying direct expert commentary on the meaning behind the data and business decisions. Notably, the general attitude toward economic prospects is cautious, emphasizing uncertainty around tariffs, high expenses (in both hiring and housing), and mixed signals from legal and international developments.

Transcript

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[Sabrina Siddiqui]

An appeals court throws out a $500 million civil fraud penalty against President Trump. Plus, more U.S. companies plan to slow hiring in the second half of 2025.

[Ray Smith]

Companies are saying there's a lot of economic uncertainty out there. You've got this perfect storm of changes this year that has just made them a lot more cautious.

[Sabrina Siddiqui]

And U.S. home sales unexpectedly rose 2% in July. It's Thursday, August 21st. I'm Sabrina Sidi Key for the Wall Street Journal, covering for Alex Oslo. This is the PM of what's the top headlines and business stories that move the world today. An appeals court threw out a more than $500 million judgment against President Trump and his business empire, paving the way for further proceedings before New York's highest court. Today's decision from a five judge panel provides a significant legal boost for Trump in a case that was brought by New York Attorney General Letitia James in 2022. Wall Street Journal reporter Corinne Ramey joins me now with the latest. Corrine this was a sharply divided ruling. What did the justices say?

[Corinne Ramey]

So the justices threw out this massive penalty, this $500 million judgment against Trump, but the rest of it was pretty complicated. There were three opinions from this court and the justices essentially did not reach a majority. And so they were divided on these various issues. What they did find, though, was that Attorney General Letitia James, who brought the case, was within her author in bringing the case under this broad fraud statute. And they also upheld some business restrictions that the trial judge had imposed on Trump, including restrictions that could make it difficult for Trump's company to borrow money and bar Trump's two eldest sons from running a company in New York State for two years. The way this court ruled on this was highly unusual. Normally the justices agree, and this was about as far from agreement as I've ever seen was more than 300 pages of the justices writing about the things they disagreed about.

[Sabrina Siddiqui]

How did President Trump react to the decision? And what did we hear from Letitia James?

[Corinne Ramey]

Both sides celebrated the parts of the ruling that were in their favor. On Truth Social, Trump praised the court for its Courage and Letitia James noted the fact that the court upheld some business restrictions and also said that her office would appeal to the state's highest court.

[Sabrina Siddiqui]

What happens next?

[Corinne Ramey]

This almost certainly goes to the court of Appeals, which is the state's highest court. In fact, this court, this intermediate appeals court, explicitly said that in the decision that even though the justices couldn't agree on some things, they came together with the goal of not ordering a new trial and sending this back to the trial court, but allowing it to move forward to the high court.

[Sabrina Siddiqui]

And what does this mean for Trump.

[Corinne Ramey]

In the short term? It's certainly good for Trump. I mean, this was a massive financial penalty and it takes this really big headache away for him in the long term. I think it remains to be seen. We don't know what the high court will do or how they'll come down on this ruling.

[Sabrina Siddiqui]

That was the Wall Street Journal's Corrine Ramey. Thank you, Corinne.

[Corinne Ramey]

Thanks, Sabrina.

[Sabrina Siddiqui]

Sales of existing homes in the US Increased unexpectedly in July, raising hopes that the long stalled housing market may be improving and that activity can gain more momentum in the fall. The National association of Realtors NAR said today that home sales were up 2% from the prior month to a seasonally adjusted annual rate of 4.01 million. The slight gain surpassed the expectations of economists who had estimated a monthly decrease in sales of 0.5%. Will Parker, a Wall Street Journal reporter writing about the housing and residential rental market, has the story. Will, what's behind the unexpected pickup in home sales?

[Will Parker]

There's a couple of things going on. Mortgage interest rates which have been so much higher than what people had been used to for a few years now they've come down enough to get more people into buying. That's one. And the thing that analysts have also seen is a pickup in activity from investors who may be buying homes to rent out or those who are buying vacation homes. So those couple of factors gave us a slight increase in sales.

[Sabrina Siddiqui]

In July, you reported that the housing market is still depressed. Why is that?

[Will Parker]

Home buying has been held back by really high prices for houses. Number one, we hit a record in price in June. You have home prices that have gone up 50% in some parts of the country over a span of five years or so. And mortgage interest rates are still quite high in combination with that, at least compared to where they were, say, five years ago. And until either of those two things changes significantly, sales are going to be below where they once were. Now a few things are heading in the right direction for buyers there's more inventory. So the number of homes available to buyers when they go out and look, there's more of them. So that's going to help buyers. It's going to keep price increases in check to some extent. And some people are hopeful that in the fall there will be even more of those homes available and more people can find a home to buy at a price that works for them.

[Sabrina Siddiqui]

So what is the outlook moving forward?

[Will Parker]

It depends a lot on if mortgage interest rates come down any further, they're still right above 6.5%. If they can get down closer to 6, you probably see more sales happen. That's a big if. The pricing is still really high. No one is predicting that home prices would fall super meaningfully, right? Maybe you get a little bit of a decline, but the ratio of the cost of a home to people's income is not improved. It's just gotten worse over the last decade or so. And things might get less bad in the near future, but probably not tremendously better.

[Sabrina Siddiqui]

Will Parker is a reporter at the Wall Street Journal. Thank you, Will.

[Will Parker]

Thank you.

[Sabrina Siddiqui]

News Corp. Owner of the journal, also operates realtor.com under license from Narrative. Walmart led US stocks lower today as concerns about the giant retailer's costs overshadowed a strong sales performance. Walmart's quarterly profit missed expectations and the company's CEO warned tariffs will hit second half results ahead of Federal Reserve Chair Jerome Powell's highly anticipated Jackson Hole speech tomorrow. The Dow and Nasdaq closed down about 0.3%, while the S&P 500 ended lower for a fifth consecutive day, down 0.4%. US manufacturing is rebounding, but so are price pressures. A flash purchasing managers index from SP Global, spanning both manufacturing and services, rose to 55.4. The reading suggests overall activity continued to expand and at a quicker clip. Manufacturing activity hit the highest in more than three years, nearing the threshold that divides contraction from expansion. The pace of expansion in services slowed slightly. Still, average selling prices rose at their fastest in three years, with tariffs cited as the principal cause coming up, twice as many employers as last year say they plan to pull back on filling jobs. What's behind the slowdown? That's after the break.

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[Sabrina Siddiqui]

The number of Americans who newly filed for unemployment benefits rose last week, according to the Labor Department, which also said the size of the unemployed population hit a new recent high earlier this month. In the week through August 16, new jobless claims filings rose to 235,000, up from 224,000 a week earlier. Continuing claims, an indicator of the size of the total unemployed population, came in at 1.97 million in the week through August 9, compared with 1.94 million the previous week. Meanwhile, one in five US employers plan to slow hiring in the second half of 2025, nearly double the rate of companies that anticipated bringing on fewer people at this time last year. That's according to a survey by the Conference Board, which reflects yet another sign of a weakening U.S. labor market. The report marks the second year in a row that many chief human resource officers polled were planning on fewer new hires. The last time executives were broadly optimistic about hiring was the second quarter of 2023. What's behind the steady decline? Ray Smith, the Wall Street Journal's reporter covering career and workplace issues, joins me now to discuss. Ray, we've talked about how US Jobless claims rose last week. What are businesses saying about the market?

[Ray Smith]

Companies are being more cautious. They're saying there's a lot of economic uncertainty out there, such as stop and start tariffs, so they're really taking a pause and wondering how to move forward and not taking any big swings in terms of hiring. You've got this perfect storm of changes this year that has just made them a lot more cautious.

[Sabrina Siddiqui]

And how are they adjusting their behavior?

[Ray Smith]

They've been bragging to investors about shrinking their workforces and they're framing it as this is a way they can be more productive with fewer employees. That really signals to investors that this company is being smart and strategic rather than it looking like they're being cautious and scared. Novo Nordisk, for example, the company behind Ozempic and Wegovy, recently said they'd pause hiring in non critical areas. Meta, which has been on the hiring blitz for AI workers, is pausing that effort now. So it's big companies as well as smaller companies who are all saying they're.

[Sabrina Siddiqui]

Slowing hiring and what do we expect from here?

[Ray Smith]

It's sort of a wait and see approach from here, to be honest. There's still a lot of economic uncertainty with the stop and start tariffs and so companies are really waiting for things to settle down before making their next sort of job hiring moves or their next expansion moves. Right now we're still in sort of this wait and see environment.

[Sabrina Siddiqui]

That was Wall Street Journal reporter Ray Smith. Thank you, Ray.

[Ray Smith]

Thank you.

[Sabrina Siddiqui]

And finally, in other news, President Trump said today that Ukraine would have to continue attacks on Russia to have any hope of winning the war. The comments on his social media platform, Truth Social, came days after the president hosted two summits designed to end the conflict. While it wasn't immediately clear what Trump meant by his comments, White House Press Secretary Caroline Levitt said he was simply making an observation. And a former Ukrainian military officer suspected of leading a team that sabotaged the Nord Stream gas pipelines in 2022 was detained in Italy yesterday under an international arrest warrant, according to investigators and people familiar with the case. The warrant was issued by German prosecutors. The development marks a breakthrough in the international manhunt for the alleged culprits of the attack, which is thought to be among the largest acts of modern day wartime sabotage. And that's what's news for this Thursday afternoon. Today's show was produced by Pierre Bienime with supervising producer Michael Kosmides. I'm Sabrina Siddiqui for the Wall Street Journal. We'll be back with a new show tomorrow morning.

[Podcast Host/Producer]

Thanks for listening.