Actalent Labor Market and Economy Report: A Look at Trends in July 2026

U.S. employment declined by 23,000 jobs in July, marking the second monthly job loss in 2026. Although hiring activity remains subdued, the relatively modest decline compared to February's loss of 156,000 jobs suggests the labor market is soft, but not weakening significantly.

By industry, job losses were largely concentrated in local government education (-49,600) and retail trade (-19,400). Job gains were led by healthcare (+22,000).

Revisions to prior months suggest weaker job gains than initially reported. May's employment increase was revised from 129,000 to 63,000, while June's gain was revised from 57,000 to 20,000.

Despite the decline in overall U.S. employment, labor market data suggests that competition for skilled engineering and scientific talent remains elevated. Industries that Actalent supports added jobs in July, and unemployment rates for engineering and scientific professionals remain well below the national average. While many employers are taking a more cautious approach to hiring and investment, competition for skilled technical talent persists in many markets. For employers, factors including competitive compensation and career advancement opportunities remain critical for attracting and retaining qualified workers.

Average hourly earnings rose 3.2% in July, continuing a moderation in wage growth. For comparison, annual earnings growth ranged from 3.7% to 4.0% between June 2025 and February 2026.