WASHINGTON (AP) \u2014 On the face of it, the U.S. job market has looked pretty stable this year. Hiring has been solid \u2013 if not exactly spectacular \u2013 after a lackluster 2025.<\/p>\n
But underneath the headline numbers, the job market is sending mixed and confusing signals.<\/p>\n
Companies in some industries can\u2019t find enough workers and have to pay premium wages to fill vacancies. Others are making such efficient use of technology that they don\u2019t need to hire much at all.<\/p>\n
Normally, the American labor market looks either good or bad. Lately, it\u2019s been a bit of both.<\/p>\n
Layoffs are rare \u2014 but times are tough for jobseekers<\/p>\n
Americans who have jobs are enjoying unusual job security. Layoffs are low by historical standards. Companies, scarred by the surprise labor shortages that followed COVID-19 lockdowns a few years ago, don\u2019t want to risk giving up the staff they have.<\/p>\n
One week in July the number of Americans filing for unemployment benefits dropped to the lowest level in more than 50 years.<\/a> The jobless rate tumbled to 4.2% in June, the lowest in a year, and is expected to have stayed there last month, according to a survey of forecasters by the data firm FactSet.<\/p>\n But Americans who have lost their jobs \u2013 or are seeking to bust into the job market for the first time \u2013 are struggling to catch a break. One sign of their trouble: In May 27.5% of the unemployed had been out of work for six months, the most in four and a half years; the share dipped slightly but remained high in June. <\/p>\n Economists have used the term \u201cno hire, no fire\u2019\u2019 to describe the unusual job market conditions.<\/p>\n The Labor Department releases July employment numbers on Friday. They are expected to show that companies, government agencies and nonprofits added nearly 98,000 jobs last month, according to the FactSet survey.<\/p>\n That would be an improvement on the disappointing 57,000 jobs employers created in June<\/a>.<\/p>\n Rebounding from a miserable 2025<\/p>\n And it would mark a continued rebound from 2025 when the economy generated fewer than 10,000 new jobs a month \u2013 the weakest hiring outside a recession since 2002. Last year, high interest rates and uncertainty over President Donald Trump\u2019s economic policies discouraged companies from adding staff.<\/p>\n So far in 2026, employers have added an average 92,000 jobs a month.<\/p>\n In the past, that would have been an unimpressive level of hiring.<\/p>\n <\/p>\n \n Sign up for Morning Wire:<\/strong> But the United States doesn\u2019t need as many jobs as it used to keep the unemployment rate from rising. Trump\u2019s immigration crackdown and the ongoing retirement of baby boomers mean fewer people are competing for work. So the \u201cbreak-even\u2019\u2019 rate of monthly hiring, 155,000 in 2023-2024, has dropped, perhaps to nearly zero, according to a Federal Reserve study.<\/a><\/p>\n \u201cThere are just fewer people available to hire,\u2019\u2019 said Sal Guatieri, senior economist at BMO Capital Markets. For some, labor shortages translate into higher wages. The payroll processor ADP reported Wednesday that people who changed jobs last month pocketed a 7% raise, the biggest year-over-year gain in almost a year and a premium over a 4.4% increase for workers who stayed where they were.<\/p>\n At the same time, companies have become more productive in recent years, using technology to do the work that humans used to do. \u201cWe are seeing companies produce more with their current staff,\u2019\u2019 Guatieri said. \u201cSo there\u2019s less need to take on new workers.\u2019\u2019<\/p>\n Shortages of available workers and rising productivity, he said, \u201cwill keep the lid on the rate of hiring and monthly job growth.\u2019\u2019<\/p>\n Moreover, the outlook for hiring is clouded by the ongoing fighting in the Persian Gulf, which has pushed up energy prices and squeezed family budgets, and by the rise of artificial intelligence, which could either make workers more efficient and better-paid — or take their jobs.<\/p>\n Quirks in the jobs data <\/p>\n The June jobs report contained an oddity that might have reversed in July. The Labor Department numbers showed that 720,000 people dropped out of the labor force in June \u2013 and a surprising 700,000 (97%) of them were ages 25 to 34.<\/p>\n A smaller labor force means fewer people are competing for work and tends to push the unemployment rate lower. If the June drop was a statistical quirk \u2013 and the labor force rebounded last month and increased the number of people vying for jobs \u2013 the unemployment rate could surprise and tick back up.<\/p>\n
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