July 2026 Jobs Report: Why the Labor Market Feels Stuck
Publication date: Aug 04For someone looking for work, a labor market with limited movement can be frustrating. Fewer layoffs may offer reassurance, but that does not automatically create more opportunities to get hired.
In this episode of HR Current, Nicole Lobdell and Colleen Madden Blumenfeld of Challenger, Gray & Christmas discuss July 2026 jobs data and what it means for employers and job seekers. Their conversation covers hiring, layoffs, unemployment, and the low-hire, low-fire environment behind the sense that the labor market is stuck.
That combination matters because stability and opportunity are different experiences. An employee who remains in a role and a job seeker waiting for an opening may draw very different conclusions about the same market.
The episode offers a starting point for understanding those mixed signals and looking beyond a single jobs headline. Listen to Nicole and Colleen’s discussion for context on the conditions shaping work and career transitions in July.
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HR Current is a podcast from Challenger, Gray & Christmas. Like this episode, subscribe to HR Current, or tap Follow on Spotify for future conversations about work. Email the show at challengercontentstudio@challengergray.com.
EPISODE TRANSCRIPT
Featuring Nicole Lobdell and Colleen Madden Blumenfeld of Challenger, Gray & Christmas. Lightly edited for clarity and readability.
Nicole Lobdell — 0:00
Welcome to HR Current, a podcast from Challenger, Gray & Christmas. I’m Nicole, joined by Colleen, who builds these numbers every month. Colleen, start with the top line.
Colleen Madden Blumenfeld — 0:24
U.S.-based employers announced 33,429 job cuts last month. That’s down 27% from June, which came in at 45,849, and down 46% from last July, which was around 63,000.
You have to go back to July 2024, when 25,885 job cuts were announced, to find a lighter month. Every month in between was heavier, so this is the quietest month in two years.
Through July, we’re at 477,000, compared to 806,000 through the same period last year. That’s down 41%, but I want to flag something about that right away.
Last year’s February and March, you may remember, were dominated by federal workforce reductions. Government cuts accounted for about 300,000 announcements through July of last year. This year, that figure is about 21,000.
If we pull the Government layoff plans out of both years for a clean read on the private sector, you get 456,000 this year versus 514,000 last year—down about 11%.
Nicole Lobdell — 1:34
So the improvement is real, but much smaller than the headlines.
Colleen Madden Blumenfeld — 1:38
It’s considerably smaller. The 41% number is mostly the absence of last year’s federal Government cuts, so not really a private-sector recovery. But we are seeing an increase in hiring plans this year compared to last.
Nicole Lobdell — 1:51
Let’s go to AI, because it’s the leading reason.
Colleen Madden Blumenfeld — 1:55
It is the leading reason. Almost 11,000 job cuts last month were attributed directly to AI. It’s the top reason for the month, ahead of Economic Conditions, which was 7,900. Closings was about 6,000.
Year to date, AI now accounts for about 113,000. It’s 24% of the job cuts we’ve recorded in 2026—nearly one in four.
Here’s the thing I most want people to take from this: AI is not showing up as a slow trim across thousands of employers. It’s showing up in a small number of very large announcements.
We logged around 60 AI-attributed layoff plans this year. Twenty-one of those were 1,000 people or more. Those 21 job-cut plans accounted for 93,000 layoffs. The median AI announcement is 375 people.
Nicole Lobdell — 3:00
Okay, so just a handful of companies are doing almost all of it.
Colleen Madden Blumenfeld — 3:05
If you look at the year’s largest—Oracle, Dell, Meta—they all attributed layoffs to AI, and then Visa last month also.
Nicole Lobdell — 3:12
Until now, AI cuts have been overwhelmingly a Technology sector story.
Colleen Madden Blumenfeld — 3:18
Overwhelmingly. Of the 113,000 we’ve seen this year, 93,000 are in Technology. That’s 83%. Then, when you add FinTech, like Block, you’re looking at 88%.
A 2,000-person announcement from a financial company is the kind of thing we’re looking for, because we’re seeing it leak out from Technology, where it is closely related.
Nicole Lobdell — 3:39
And July’s AI numbers are down from June’s.
Colleen Madden Blumenfeld — 3:44
Yes. June was 14,000, but I’d resist reading a trend into it month to month.
How does the year compare to last year? Through July 2025, we had recorded 10,375 AI-attributed cuts. This year, it’s about 113,000. That’s 11 times larger.
Nicole Lobdell — 4:07
Let’s talk about the good news you mentioned earlier.
Colleen Madden Blumenfeld — 4:09
Hiring is up, and this is great news. Employers announced about 16,000 new jobs in July. These are hiring plans. That’s up 47% from June, which saw about 11,000 hiring plans, and it’s the strongest July since 2022.
For the year, we’re at almost 108,000 hiring plans through July, compared to 86,000 through July of last year. That’s up 25%.
It’s the strongest January-through-July period since 2023. Cuts are running lower and hiring is running higher, so it’s a good signal to see those two moving that way.
Nicole Lobdell — 4:50
Who is hiring? What industries?
Colleen Madden Blumenfeld — 4:51
Technology actually leads with 17,000 hiring plans, then Automotive with about 15,000, Aerospace/Defense with 12,000 to 13,000, Entertainment/Leisure with 12,000, and the Government sector, both state level and federal, with about 9,000.
Okay, so let’s put those two together. It appears that the labor market isn’t shrinking as much as shifting or relocating.
The two groups of workers we’re looking at—the knowledge workers who may be impacted by AI and the workers we’re seeing hiring plans for, like factory workers, manufacturing workers, and service workers—are not necessarily easily interchangeable groups.
Nicole Lobdell — 5:34
What’s the last word for the report?
Colleen Madden Blumenfeld — 5:37
July’s report showed some stability. It was a good month on the numbers: the lightest month of cuts in two years, the strongest July hiring since 2022, and year-to-date hiring up 25% ahead of last year.
But you can hold two things at once. The aggregate is improving, it seems, and the composition is changing underneath it.
Twenty-four percent of this year’s cuts now carry AI as the stated reason, or as some part of the reason those cuts occurred. Generally, it’s a small number of very large decisions made by a small number of very large companies, but it’s no longer confined to Technology.
Nicole Lobdell — 6:17
Colleen, thank you. The full July report and data tables are at challengergray.com.