Dive Brief:
- Month-to-month job cuts are down 27% between June and July, according to data analysis by Challenger, Gray and Christmas. U.S. employers announced 33,429 job cuts in July.
- Overall, layoffs are down 46% year over year, and July had the lowest monthly total recorded in two years.
- Despite a potentially optimistic outlook, job losses persist — especially in the technology sector.
Dive Insight:
While the unemployment rate dropped slightly to 4.1%, according to the U.S. Bureau of Labor Statistics, it fell partly because labor participation also dropped. That is to say, “people on the margins [are] stepping aside until opportunities become more plentiful,” ZipRecruiter Labor Economist Nicole Bachaud said in an Aug. 7 statement.
Overall, nonfarm payroll employment decreased by 23,000 jobs in July, per BLS.
The verdict on the state of the labor market? “Don’t put too much stock in a single report, but don’t ignore the fact that the plane is starting to shake as the labor market looks to be entering a rough patch,” Cory Stahle, senior economist for the Indeed Hiring Lab, said in an Aug. 7 statement.
In the Challenger report, the technology sector is highlighted as the one with the highest rate of layoffs: 9,867 job cuts in July, a 67% year-over-year increase. Finance and government were the sectors right behind technology for layoffs.
Regarding the tech sector, the report notes that artificial intelligence may still be to blame for steep month-to-month layoffs. Still, Andy Challenger, workplace expert and chief revenue officer for Challenger, Gray and Christmas, said in a statement, “While AI is shifting the labor market, it is not dismantling it.”