July 2026 Market Trends Report
Last month, we reported the uncertainty of June's job numbers. The July report brings the labor market into sharper focus — but not in the direction we’d hoped.
According to the Bureau of Labor Statistics (BLS), employers cut 23,000 jobs in July. This leaves the market on shaky footing, and it’s not only last month that brings concerns.
Revisions to May and June erased 103,000 jobs, contracting to 63,000 and 20,000, respectively. Despite these overall losses, at the industry level, there’s room for hope that the market could bounce back.
Government employers are responsible for the deepest cuts in the report (-53,000), followed by leisure and hospitality (-40,000). Retail trade, financial activities, and mining and logging also downshifted, with the remaining eight major sectors adding jobs to the economy.
In the government realm, local educators lost the majority of jobs. “This is most likely due to a misfire in the seasonal adjustment process or a shift in typical hiring timelines,” Economist Cory Stahle explained. “It’s very possible we’ll see some of that reversed in the next report.”
Despite the pessimistic headlines surrounding the job market this week, there are bright spots: most goods-producing industries added payrolls. With some of the steepest government losses potentially tied to seasonal adjustments, the next report could offer a more balanced picture.
Jobs Market Overview: July 2026
4.1%
Overall unemployment rate
Unemployment ticked down from 4.2% last month, sitting between a post-pandemic low of 3.4% in April 2023 and a high of 4.5% in November 2025.
-23k
Jobs added
In addition to steep losses within government, the BLS revised May and June down by 103,000 positions.
61.4%
Labor force participation rate (LFPR)
Industry Employment Trends
OVERALL ECONOMY
-23k
Monthly job change
(+316k year over year)
| Industry | Monthly Job Change | YOY Difference |
| Manufacturing | +5k | -14k |
| Automotive | -3.9k | -14k |
| Warehousing & Storage | -9.5k | -34.7k |
| Architectural & Engineering | +4.6k | +36.6k |
| Construction | +22k | +82k |
Source: Bureau of Labor Statistics' Economic News Release
Sector-by-Sector News: July 2026
Construction Jobs Report
Month-over-month jobs change: +22,000
Year-over-year jobs change: +82,000
Construction remains one of 2026’s strongest job-creating engines in a cooling market, but the latest data suggest the story is more nuanced.
While the industry is up 22,000 jobs month over month and 82,000 year over year, contractor backlog is starting to lose momentum. Associated Builders and Contractors’ Backlog Indicator slipped from June and from a year ago. This leaves contractors with an estimated eight months of work in the pipeline and a sharp divide between nonresidential and residential.
Hyperscaler investment continues to fuel nonresidential construction, putting the sector at the forefront of job growth. Nonresidential construction added roughly 20,000 jobs in July, led by specialty trade contractors (+15,400) and nonresidential building construction (+4,200). Heavy and civil engineering added another 400.
Residential construction, meanwhile, is heading in the opposite direction. Residential building shed 500 jobs in July, while residential specialty trade contractors added 2,600 — continuing a pattern of weakening growth in residential trades.
It’s clear that construction isn’t cooling evenly, yet the fight for skilled workers continues, especially for firms building data centers, infrastructure and other nonresidential projects. That demand could persist as hyperscalers pour hundreds of billions into new infrastructure, while power, land and permitting constraints continue to stretch project timelines.
Manufacturing Jobs Report
Month-over-month jobs change: +5,000
Year-over-year jobs change: -14,000
June Manufacturing PMI: 55.6%*
*A PMI reading above 50% suggests economic activity is expanding
Manufacturing is holding steady, but uncertainty is calling the shots. The Institute for Supply Management’s PMI hit 2.3 points above June, with new orders, production and employment growing alongside prices.
Input costs continue to rise as geopolitical conflict, tariffs and high interest rates shape purchasing decisions across the sector. Even where demand is stable, buyers are increasingly cautious about where and when they spend.
Still, bright spots are breaking through. Defense and semiconductor manufacturing are fueling strong machinery demand, while AI is driving enormous demand for electronics manufacturers.
Growth remains increasingly selective, with strength concentrated in a handful of manufacturing markets while other segments struggle to gain traction. Geopolitical and trade uncertainty is also prompting some companies to delay capital purchases and take a more cautious approach to investment.
With geopolitical and trade pressures looking less like temporary disruptions and more like a permanent backdrop, manufacturers are moving forward carefully. The result: manufacturing employment increased by just 5,000 jobs last month and declined by 14,000 jobs since last year, underscoring how uneven the sector’s growth has become.
Warehousing & Storage Jobs Report
Month-over-month jobs change: -9,500
Year-over-year jobs change: -34,700
June Logistics Managers' Index (LMI): 68.9*
*An LMI reading above 50 indicated logistics are expanding.
The logistics sector is still expanding, but momentum is waning. The July Logistics Managers’ Index came in at 68.9, down 2.2 points from June’s 71.1. While it remains a historically strong reading, the slowdown — particularly in inventory growth — suggests the sector is moving into a more measured phase.
Respondents describe a market pulled in different directions. Tariffs, inflation and geopolitical uncertainty are reshaping inventory strategies, with some retailers cutting inventories after pulling goods forward, while upstream companies maintain elevated warehouse activity.
Warehousing utilization remains strong at 66.1, while warehouse prices climbed to 75.5, their highest since early 2025.
Hiring, however, is telling a different story. Warehousing and storage employment fell by 9,500 jobs in July and is down 34,700 jobs, or 1.9%, year over year. With warehouse demand and prices rising even as employment declines, the big question is whether logistics growth can translate into hiring — or whether automation and efficiency gains are allowing the sector to grow with fewer workers.