Employment Trend Analysis

Today’s jobs report suggests that the effect of past rate hikes is likely now peaking and confirms that the job market has slowed this summer. The increase in unemployment was primarily due to job loss rather than entry in contrast to the last two months. The slowdown in payroll growth alongside the increase in unemployment should solidify views in the Fed that the time to recalibrate monetary policy is near, if not now. Today’s report has also confirmed that runway for robust growth in Leisure and Hospitality is at an end, which means payroll growth primarily now rests on Government and Healthcare, which accounted for over 70% of payroll growth in July. Average hourly earnings growth also decelerated from June to July, further stamping out concerns over wage-driven price inflation. 1. Nonfarm payrolls increased by +114K (well below consensus) with downward revisions in June (-27K) and May (-2K). The composition of job gains became even more skewed compared to those prior months. Over 70% of payroll gains occurred in Government and Healthcare and Social Assistance. Construction made notable gains. The tech-heavy Information sector shrank, with broad declines in employment across technology and media. Later this month, the BLS will report preliminary annual benchmark revisions that may present a more downbeat picture of the labor market but likely to preserve overall trends. 2. Unemployment increased to 4.3% from 4.1%. Since May, the unemployment rate increased due primarily to reentrants and new entrants, which we would expect as wage gains continue to outpace inflation. However, in July, the unemployment rate increased primarily due to job loss. We also see the labor force participation rate for 25 to 54 year olds tick up past its 20-year high again. July’s household survey mostly aligns with the more downbeat picture presented in the establishment survey with the number of those employed part-time for economic reasons increasing. The household survey also shows a change in the mix of part-time vs. full-time employment with full-time employment increasing and part-time employment decreasing from June to July. While participation in the labor market continues to hold up, it is clear that opportunities are becoming harder to come by, making job loss more damaging. 3. Wage growth (measured by average hourly earnings) rose at an annualized rate of 2.8% (3.7% for private-sector production and nonsupervisory employees) decreasing from 3.5% (4.1% for private-sector production and nonsupervisory employees) in June. This moderation alongside the growth in labor supply should stamp out concerns about wage-induced acceleration in inflation. 4. Employment at Temp Agencies declined by -9K, continuing its slide since March 2022 with an upward revision (+26K) to the rough showing in June. Overall, the labor market appears to have slowed going into the summer, and there continue to be no signs of reacceleration on the horizon. #jobsreport #linkedin

EY-Parthenon EY Macro Pulse Don't be fooled... this is a weak US labor market ⚠️ The labor market is under significant pressure from conflicting crosscurrents. Labor supply has taken a meaningful hit from aging demographics and a historic drop in #immigration, but labor demand has been weakening even faster. Whether you look at negative job growth over the past three months, recessionary levels of job growth concentration, a hiring rate at a decade low, softening wage growth, or an unemployment rate that is gradually creeping higher, the conclusion is the same: persistent policy headwinds and a high-cost, high–interest rate environment have pushed business leaders into cost-control mode. 📉 In December, the economy added just 50,000 jobs, falling short of expectations. Combined with a cumulative 76,000 downward revision to prior months, the three-month average of nonfarm payroll growth has fallen to negative 22,000. 📊 In 2025, the #economy added just 584,000 jobs—or roughly 49,000 per month—before benchmark revisions and population control adjustments. This stands in stark contrast to the 2 million jobs gained in 2024 and represents the weakest annual increase outside a recession since 2003. The January employment report will incorporate benchmark revisions to the Quarterly Census of Employment and Wages (QCEW), which preliminarily indicate that 911,000 fewer #jobs were created between April 2024 and March 2025. When combined with new Census population estimates to be released in March, there is a high likelihood that job growth in 2025 was close to zero. 📉 The #unemployment rate edged down to 4.4% in December, but this mostly reflects weaker labor market engagement, as the labor force participation rate slipped to 62.4%. Meanwhile, wage growth bounced modestly, with average hourly earnings rising 0.3% m/m and annual wage growth ticking up 0.2pp to 3.8%. Still, wage growth momentum has been on a clear downward trajectory over the past two years, as business managers have curbed entry wages and capped annual wage increases. 🧭 Taken together, these trends point to persistent fragility in the labor market as firms contend with uneven demand, elevated costs, margin pressures, and ongoing uncertainty. We expect #job growth to remain well below trend, averaging only about 30,000 per month in the first half of next year, with the unemployment rate gradually drifting higher toward 4.8%. 🏦 Taken at face value, the December #employment report would support the Fed holding rates steady in late January. However, the January employment report will likely reflect a much softer employment picture once benchmark revisions are incorporated, and the February report should confirm this softness when new Census population estimates are included. As such, we continue to believe the #Fed will deliver a 25bp rate cut in both March and June to accommodate a softening labor market as inflation hovers around 3%.

The bottom line for the August Employment Situation is that hiring is trending lower and is concentrated in a few narrow sectors. Unemployment is rising bit-by-bit but the restraint is due more to reshaping the demographics of available labor in the job market. Wage growth continues. However, it may be an artifact of hiring taking place for skilled workers who can command bigger compensation but even that seems to be ebbing. When the FOMC meets on September 16-17, it will have more and more convincing evidence that the mandate for maximum employment could use a little support from a rate cut. However, that will have to be balanced against the next round of inflation data for August – the PPI on Wednesday the 10th and the CPI on Thursday the 11th. If the price increases associated with tariffs are more visible in the data, anything larger than a 25basis point cut is unlikely. Nonfarm payrolls were up 22,000 in August and well below the market consensus. There was a net downward revision of 21,000 to the prior two months. Private payrolls rose 38,000 in August while government payrolls were down 16,000. For the third quarter to date, monthly payroll increases averaged 51,000, down somewhat from the average of 55,000 a month in the second quarter and lower than the average of 111,000 in the first quarter. Overall hiring has slowed substantially with mixed conditions across industries. Goods-producers payrolls were down 25,000 in August with declines in all major categories. Private sector service-providers’ payrolls were up 63,000 in August, but the majority of that was from a 46,800 increase in health care and social assistance and 28,000 in leisure and hospitality. Average hourly earnings are up 0.3 percent in August from July and up 3.7 percent year-over-year. In the aggregate, workers continued to receive moderate raises but the trend is slowing. The unemployment rate rose one-tenth to 4.3% in August and was in line with market expectations. This was the highest since 4.5% in October 2021. The labor force was up 436,000 to 170.8 million in August, with the number of employed up 288,000 and unemployed up 148,000. A 4.3% unemployment rate is not a bad one but it needs to be read in the context of underlying chances in the labor market due to the massive influence of policies from the Trump administration. There were indications of a less positive situation for workers in August. The number of people working part time for economic reasons was up 65,000 to 4.749 million. Job losers were up 32,000 to 3.437 million. The number of job leavers was unchanged at 784,000 in August. New entrants to the labor force are down 199,00 to 786,000 while reentrants are up 107,000. #nonfarmpayrolls #unemploymentrate Please do not use without attribution. Prepared without use of AI. Copyright © Theresa A Sheehan

Waller at the Fed cited a paper that deserves attention: “Canaries in the Coal Mine? Six Facts about the Recent Employment Effects of AI” by Erik Brynjolfsson, Bharat Chandar, and Ruyu Chen (August 2025). Using high-frequency payroll records through July 2025, the authors track employment in occupations most exposed to generative AI and show why output can remain firm while hiring cools. The central result is about who adjusts first. Early-career workers aged 22 to 25 in the most exposed roles experienced roughly a 13% employment decline relative to less-exposed peers, even after controlling for firm shocks. Mid-career and senior workers were broadly stable. The primary adjustment so far is headcount, not pay. Task composition matters. Where AI replaces tasks, the employment hit is larger. Where AI augments tasks, the impact is smaller and productivity gains appear sooner. These patterns persist even when excluding obvious tech firms and remote-heavy roles, which suggests a broad-based shift rather than a Silicon Valley artifact. Adoption is moving quickly. On a widely used coding benchmark, accuracy rose from 4.4% in 2023 to 71.7% in 2024. By mid-2025, about 46% of US adults reported using large language models at work. That pace aligns with what many firms describe as capital deepening and workflow redesign in place of large hiring waves. Firms are meeting demand with investment and process changes, which preserves firm-specific know-how in mid-career roles while trimming entry-level positions in codifiable tasks. For policy, the near-term priority is transition support for younger workers in exposed occupations and training that shifts tasks from automation toward augmentation. This is the cleanest early, large-scale evidence that AI is already reshaping entry-level employment in exposed jobs while leaving mid-career roles more resilient. It supports a macro view of steady output with softer job creation at the margin and a medium-term productivity lift.

Information sector employment is back to 2017 levels. Nine years of job growth, gone. The Information sector—tech, media, telecom, and data services—overshot its pre-pandemic trend during the 2021–22 hiring boom. No question. But the correction didn't stop at the trend line. It blew right past it. If the sector had simply continued its pre-2020 growth rate (~1% per year), employment today would be about 246,000 higher—an 8% gap. And it's still widening. The overhiring has been fully reversed. Employment is now below where it would have been if the pandemic had never happened. These aren't jobs that were lost. They're jobs that never arrived—roles that were never posted, attrition that was never backfilled, junior positions that quietly disappeared from headcount plans. What's driving it? Not any single factor. But when output keeps growing while employment stalls—especially in sectors where generative AI is most easily deployed—it gets harder to see this as just a cyclical correction. Something structural may be underway. And Information is just one piece of it. In my latest Labor Matters, I show this same pattern playing out across the entire white-collar economy—finance, insurance, professional services—to the tune of 3 million missing jobs. #AI #labormarkets #futureofwork #recruitment

The January jobs report is out today from the BLS (after a several day delay). Today's report is a tale of two time periods—January was much better than expected providing a hint of optimism heading into 2026, but annual revisions to 2024-2025 show the job market has been much softer in recent years that previously reported. 🟢 January's data was green across the board. 130,000 jobs added was well above expectations. Unemployment fell to 4.3%, continuing to improve from 4.5% in November. The trend over the last 3 months has been of a slowly strengthening job market. 🔙 Each year, the January jobs report includes annual benchmark revisions*. The revisions this year reveal a sharply weaker job market in 2024 and 2025. 2025 full-year job gains were revised down from 584,000 to 181,000, the slowest since 2020. To some extent, this is hard data catching up with worker sentiment which has been sour on the job market for the last few years. 🤓 *Benchmark revisions combine the timely but less accurate monthly survey data with more accurate but less timely unemployment insurance records to benchmark March 2025 employment levels. This is a regular part of the process, these revisions are in line with expectations, and do not indicate anything untoward. 🩺 The revisions make health care even more central to jobs growth over the last year. In 2025, total nonfarm payrolls grew 181,000 while health care & social assistance payrolls grew 693,200, implying all other industries lost 512,200 jobs. 📈 Prime-age (25-54) labor force participation jumped to 84.1% in January 2026, the highest level since 2001. The "nobody wants to work anymore" myth hasn't been more wrong in over two decades. Overall, you are likely to see headlines running in both directions: negative ones highlighting the downward revisions and positive ones highlighting the strong January numbers. my takeaway would lean toward the positive ones. Understanding 2024-2025 is useful, but it's still a backwards look. If the January improvement continues, the 2026 job market can beat out 2025's (admittedly a low bar). #jobsreport #economy #news

Jobs Surge in January, but Massive Revisions Reveal a Much Weaker 2025 The U.S. Bureau of Labor Statistics released the January Employment Situation report this morning, and the headline numbers came in stronger than expected. Nonfarm payrolls rose by 130,000, roughly double the consensus forecast of about 55,000 to 65,000 jobs. The unemployment rate edged down to 4.3 percent instead of holding at 4.4 percent as expected. The labor force participation rate increased to 62.5 percent, and average hourly earnings rose 0.4 percent in the month and 3.7 percent over the year. Average weekly hours also moved higher, and manufacturing payrolls returned to positive territory. Taken together, the January data point to a labor market that is still generating income and supporting consumer spending. Hiring beat expectations, unemployment declined, and both wages and hours worked moved in a direction consistent with stable household cash flow. But the revisions tell a very different story about the past year. The annual benchmark revision reduced payroll employment for March 2025 by roughly 860,000 jobs. More importantly, average monthly job growth for 2025 was revised down to about 15,000 per month, compared with roughly 49,000 previously estimated. That changes the narrative around the labor market. Instead of an economy that was steadily adding jobs through 2025 and is only now cooling, the revised data suggest job growth had already slowed to a near-stall pace last year. The labor market was not running hot and then suddenly weakening. It was already operating at a much lower speed than earlier estimates suggested. That distinction matters for policy. A single strong payroll report does not erase a year of very modest job growth. For the Federal Reserve, the focus now shifts to whether unemployment begins to rise, not whether one monthly number beats expectations. If the labor market has been growing at only a minimal pace, it has less margin for error than previously believed. For consumers, this type of environment usually means stability without acceleration. Employment remains solid, but job switching slows, wage gains become more measured, and spending behavior tends to shift toward essentials and high-confidence purchases. The January report shows strength in the present. The revisions suggest weakness in the recent past. And it is that revised trend, not the single monthly surprise, that will ultimately shape policy decisions and consumer behavior. Havas Edge tracks the labor market closely because shifts in hiring momentum often signal changes in consumer confidence and spending patterns before they appear in broader economic data.

Payrolls growth in August disappointed again, and the unemployment rate ticked up. Wage growth was strong, with the trend still elevated vs inflation target pace. 1️⃣ Payrolls rose 22k in August, vs 79k in July (revised up from 73k). June & July payrolls were revised down by 21k. Near-term payroll growth remains below the 111k breakeven pace needed to keep the 3-month average unemployment rate at 4.2%. Adjusting BLS population projections for 2020–25 with CBO updates and lower net immigration, the breakeven payrolls pace rose faster (gray vs purple lines in first chart 👇). Payrolls trends have lagged the adjusted CBO breakeven pace since early-2024 (orange vs gray lines 👇). Upside risks to the unemployment rate over the near-term have thus increased according to this metric. 2️⃣ The unemployment rate increased 10bps to 4.3%. More precisely, from 4.247% in July to 4.324%. Household employment grew 288k. Labor participation increased 10bps to 62.3%. 3️⃣ Hourly wage growth was +0.3% m/m (same as unrevised July) and 3.7% y/y, down from 3.8%. For production & non-supervisory workers, July m/m wage growth rose from +0.3% to +0.4%, and y/y from 3.8% to 4.2%. Furthermore: ➡️ August’s data on total and short-term unemployed/employed helps estimate the job-finding rate, which bounced back as overall unemployment rose less than newly unemployed: odds of exiting unemployment went from 43% to 47%. ➡️ Combining job-exit (up in August) and job-finding rates gives a flow-consistent unemployment rate that had led the official rate higher through 2024 (second chart 👇). Its smoothed trend suggests relative stability around 4.3% near term. ➡️ Given uneven jobs growth across sectors, adjusting wages for composition is crucial. Using the Atlanta Fed method, August m/m wage growth was unchanged, but July was revised to 0.4%. For production/non-supervisory workers this correction did not alter official numbers. Annual wage growth still exceeds rates consistent with 2% inflation, more in line with ~3% as implied by “Main Street” inflation expectations (final chart 👇). Recent jobs reports show a murky labor market: payrolls growth decelerating, unemployment edging up, and wage growth stubbornly above the 2%-consistent pace. Weak payrolls likely suffice for a Fed rate cut at the September FOMC, but the other elements of the labor market data combined with elevated inflation expectations and sticky underlying inflation will constrain further easing. For more visit Macro Market Notes: https://lnkd.in/dR488qaT #jobsreport #wages #federalreserve

Weak August nonfarm #payrolls (22,000 vs 75,000 expected), alongside a slight uptick in the unemployment rate (4.3% vs 4.2% in July), likely cement the case for a 25-bps rate cut by the #Fed on September 17. The 3-month average monthly change in nonfarm payrolls stood at 29,000 jobs in August, down from 209,000 at the end of 2024. We agree with the notion that smaller increases in the labor force, by shrinking the pool of workers available to be hired, play a part in reducing the pace of employment growth. However, there are also indications that private sector demand to add jobs has softened materially since earlier this year. Layoffs remain contained, as also evidenced by range-bound initial jobless claims; but hiring has decelerated markedly, and the ratio of job openings (as measured by the JOLTS survey) to total unemployment has now fallen to 1 (in 2022, there were 2 jobs for every unemployed worker), signaling that it could get incrementally more difficult for unemployed workers to find new jobs. Historically, employment growth leads the unemployment rate by a few months. We are carefully monitoring how consumer confidence, income and spending evolve over the next few months. Recent consumer confidence data suggests that households have become more concerned about the availability of jobs and job security, reinforcing the sense that the recent low hiring/low firing environment looks increasingly precarious. At the same time, income growth does not flash a red light yet. Aggregate weekly payrolls (the product of payrolls, average hourly earnings and weekly hours worked, and a proxy for income growth) continued to grow at a relatively healthy pace (4.4% YoY), as wage growth remains robust for now (3.7% YoY). This supports the view that slower employment growth should not necessarily be a symptom of deteriorating labor market conditions, if occurring against the backdrop of a slower expansion of the labor force. That said, the trend should be monitored as much as the level, and the 3-month annualized pace has now declined to 2.4% from 5.6% at the end of 2024. In our view, this adds to the bulk of evidence that, over the summer, supply-side dynamics (i.e. labor force growth) have been joined by demand-side weakness in explaining recent softness in labor market conditions. While a September rate cut by the Fed looks increasingly likely, what happens next remains uncertain. Core CPI should continue to experience tariff-related upward pressure in Q4, limiting the Fed’s ability to commit to a preset course of action, and complicating its efforts to unify the FOMC around a consensus view. That said, our view is that a combination of political pressure and prolonged below-trend economic growth could eventually result in more frequent cuts in 2026, and the August jobs report points to the risk that this timeline could be accelerated, should labor market conditions deteriorate further. #TIAAWealthManagement #MarketOutlook

LinkedIn is the largest professional network in the world with over 1.3B members. As such, we have unique data and insights on the world of work and what are the trends arising in labour across the world. We call this data our '#EconomicGraph' and it can see the trends in work faster than any other dataset in the world. Here are some we've noticed about the impact of #AI in work and careers: 1. Hiring has slowed, but it's not because of AI Despite headlines, AI isn’t the culprit behind slow hiring. LinkedIn data shows economic uncertainty, and monetary policy shifts are the primary drivers. Advanced economies are struggling the most, with hiring down 20%–35% compared to pre-pandemic levels (Australia -21%, US -23%, Singapore -21%, UK -25%).. Conversely, emerging markets like India (+40%) and the UAE (+37%) are showing ongoing strength. The slow hiring is mostly visible in large Western enterprises that are off-shoring labor to India or downsizing, but SMBs and non-western markets remain resilient. 2. Entry-level roles have not been disproportionately impacted by AI While there is definitely a slowing in entry-level hiring, it is not a break from trends we have seen since 2019. Even with the rise of AI, the biggest factor in the hiring rate of entry level roles is determined by the Interest Rate. In fact, the outlier was between 2016 and 2022, where companies added more entry-level workers than experienced workers. From 2022 to 2025, the entry-level share declined modestly, returning toward historical norms. 3. AI skills are creating new jobs In the near term, AI is creating more jobs than it is replacing. In the past two years, employers have created at least 1.3 million AI‑related job opportunities, including data annotators, AI engineers, and forward‑deployed engineers. These roles didn’t exist five years ago, but they have quickly become essential to digital economies. Despite this, AI adoption is low and concentrated in a few functions, not all working diciplines. 4. AI Literacy, Conflict Mitigation and Adaptability are the fasts growing skills In the US, jobs requiring AI literacy grew 70% year-over-year. Employers are urgently seeking a blend of technical fluency and distinctly human capabilities (like adaptability, problem‑solving, and communication) across a variety of roles. The blend of AI skills (both AI engineering skills and AI literacy skills) and distinctly human capabilities is what will give companies an advantage. 5. 'Content Creator' is the most aspiring career for Gen Alpha Of the top ten job aspirations for the Gen Alpha demographic, 3 are in the Content Creator sphere: 1. YouTuber, 2. TikTok Creator, 8. Professional Online Streamer. We've seen this trend rise across LinkedIn as well with a 90% YoY increase in 'Creator' professional on our platform in the last 12 months.