July 2026 Job Changes by Category and Industry
Digging into the jobs report
We are still working through last week’s job report. The softer-than-expected jobs data is requiring us to dig deeper into the findings to understand what is happening and why. In today’s graph, we share the monthly changes in jobs by category and industry. For ease, we sorted the graph by jobs created.
This data can be found in Table B of the Establishment Situation Summary provided by the BLS.
In July, nonfarm payroll employment decreased by -23,000, and the unemployment rate fell slightly to 4.1 percent. Market expectations were for an increase of 88,000 jobs.
LFPR
The LFPR is the total percentage of US residents in the labor force. It represents the relative amount of labor available to produce goods and services in our country. The rate includes civilian, non-institutional people age 16 and over who are currently working or are unemployed and actively looking for a job. It does not include those who are unemployed and not actively looking for a job.
The Labor Force Participation Rate continues to fall. Fewer Americans relative to the working-age population are either employed or are looking for a job.
We have discussed the drastic fall in LFPR for those 55+ and how a stronger stock market has made it easier to retire. However, for the overall population, the LFPR continues to fall for other reasons.
Youth disengagement: Labor market attachment is declining for those 16-24. There are two factors at play here. Teens are emphasizing education and training, and the outlook for entry-level jobs has been declining, forcing younger workers not to participate in the labor market.
Immigration: Immigrants tend to be more attached to the labor market compared to domestically born individuals. The administration’s crackdown on immigration has caused talented and educated immigrants to find opportunities in more welcoming countries.
The Gig Economy: While being a gig worker is technically employed, many active gig workers list themselves as "not in the labor force" on standard government questionnaires, causing measurement error.
The Bottom Line
The labor market is shifting as we speak. It is important to keep in mind that labor market data is usually considered a lagging indicator. By the time we see changes in the data, the economic environment has already changed. Also, one month’s data does not make a trend. We will continue to keep an eye on the data and report back to you to help make sense of the economy and your place in it.