U.S. employment declined by 23,000 jobs in July, marking the second monthly job loss in 2026. Although hiring activity remains subdued, the relatively modest decline compared to February's loss of 156,000 jobs suggests the labor market is soft but not weakening significantly.
By industry, job losses were largely concentrated in local government education (-49,600) and retail trade (-19,400). Job gains were led by healthcare (+22,000).
Revisions to prior months suggest weaker job gains than initially reported. May's employment increase was revised from 129,000 to 63,000, while June's gain was revised from 57,000 to 20,000.
As for the job categories Aston Carter supports, job postings declined month-over-month but remained higher compared to a year ago. Despite the overall decrease, demand increased in July for several occupations, including shipping and receiving clerks (+1,468 postings), tax examiners and collectors (+1,023), and schedulers and operations coordinators (+628).
Average hourly earnings rose 3.2% in July, continuing a moderation in wage growth. For comparison, annual earnings growth ranged from 3.7% to 4.0% between June 2025 and February 2026.
U.S. employment declined by 23,000 jobs in July, following a gain of 20,000 in June. Employment is up by just 0.2% year-over-year.
The unemployment rate declined slightly from 4.2% to 4.1% in July. Unemployment rates close to 4.0% suggest a relatively limited supply of available job seekers.
The labor force participation rate ticked down to 61.4% in July. The number of people aged 55+ who are not in the labor force and not seeking work has increased by 1.4 million over the past year, suggesting retirements are contributing to the declining participation rate.
Layoffs were unchanged at 1.8 million in June. Quits were relatively unchanged at 3.2 million, though they have risen from 3.0 million since April. Quits and layoffs data lag one month behind other employment data.
Source: Bureau of Labor Statistics' Employment Situation Summary
Labor Market Analysis
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