Layoffs Are Low, Hiring Is Cautious, & Employers Have Room to Be Selective
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The Federal Reserve left interest rates unchanged yesterday, holding the federal funds target between 3.5% and 3.75%, and the vote told me more than the decision. Three members dissented, all of them wanting a hike, for a 9-3 split (Indeed Hiring Lab, July 29, 2026). A divided Fed with no clear forward guidance is exactly the kind of thing that pushes companies to freeze hiring decisions, so it’s worth understanding what actually drove the hold.
Inflation drove it, not the job market. Prices fell in June, with headline CPI down 0.42% and core CPI down 0.02% on the month, while the Indeed Wage Tracker puts wage growth near 2.4% against headline inflation of 3.5%. When pay is growing a full point slower than prices, wages are not the thing pushing inflation up.
For anyone making hiring and pay decisions, this is the headline. For most of the post-pandemic stretch, every raise got blamed for feeding inflation, and employers felt pressure to hold pay down to avoid looking like part of the problem. The cover is gone. Prices are moving on tariffs, AI-driven demand, and supply chains, none of which a hiring manager controls.
The revision underneath the decision matters too. Employers added 74,000 fewer jobs this spring than initially reported, cooling the narrative that hiring was heating back up. If you’re planning headcount for the back half of the year, plan for a stable market, not one that’s accelerating. My advice is to make your comp and headcount calls on your own business, not on a guess about what the Fed does next. When the openings you need filled are real, we can help you hire regardless of where rates land.
Initial Claims Held at 197,000, and Firing Stayed Rare
New unemployment claims came in at 197,000 for the week ending July 25, up 9,000 from the week before and still low by any historical standard (U.S. Department of Labor, Employment and Training Administration, July 30, 2026). The 4-week moving average, which smooths out the weekly noise, actually fell by 5,000 to 202,750, so the trend points down rather than up.
The broader picture looks stable. The insured unemployment rate held at 1.2%, and continued claims (people still collecting benefits week to week) sat near 1.78 million, down from roughly 1.94 million a year ago. Fewer people are stuck collecting benefits now than at this point in 2025. The largest drop in new claims came out of New York, and no state posted a meaningful increase.
Here’s the catch, and it connects straight back to the Fed. Low claims measure firing, not hiring. People keeping their jobs is good news, and it says nothing about how hard it is for someone out of work to find the next role. Continued claims are the number I watch most closely: they’re falling year over year, which is healthy, but if they start climbing while initial claims stay low, that’s the signal that hiring has frozen and the unemployed are getting stuck. For employers, a low-firing market is one where you can staff deliberately instead of scrambling.
Staffing your team doesn’t have to be hard.
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The Hiring Rate for Unemployed Workers Actually Rose
The Chicago Fed released its real-time labor market read this morning, ahead of the government’s official jobs report, and it points to a market that’s holding steady or easing slightly. Its unemployment forecast for July is 4.13%, down from the BLS actual of 4.19% in June and 4.27% a year ago (Federal Reserve Bank of Chicago, July 30, 2026, reference week ending July 18).
Two moving parts drive that forecast. The layoffs and other separations rate came in at 2.05%, down slightly from 2.08% in June. The hiring rate for unemployed workers, meaning the share of unemployed people who found a job or left the labor force, rose to 45.52% from 44.59% the month before. Fewer people losing jobs, more people finding them, and both push the unemployment rate down. The Chicago Fed puts the odds at 54% that the official rate falls, 26% that it holds, and 20% that it rises.
The hiring rate is the number I’d flag. For months the worry has been that layoffs stay low while hiring stalls quietly, leaving unemployed people stuck, and this reading says the opposite happened in July. One honest caveat: the hiring rate counts people who left the labor force alongside those who got hired, so a rising number is not purely good news. Line up all three of today’s stories, though, and you get a coherent picture. The Fed is holding because of inflation, firing is rare, and hiring for the unemployed improved. A market like this rewards patience, and it’s where a strong candidate still moves quickly while the marginal one waits longer.
Your Employees Adopted AI Before You Wrote a Policy
New survey data from INTOO and The Harris Poll flips the usual script on workplace technology. Normally a company buys a tool, writes the rules, and employees adopt it. With AI, workers went first. Nearly three-quarters of employees (72%) say AI is being used for business purposes somewhere in their organization, but 22% say that use is informal and employee-driven, with no company-approved tools or process behind it. Only 12% report company-wide use through formal tools, and 17% say AI is actively reshaping workflows, roles, or workforce planning (INTOO/The Harris Poll, July 15, 2026; 1,085 employed U.S. adults surveyed June 15-16, +/- 3.5 points).
Sentiment leans positive. 34% are curious to learn more, 34% are excited about AI’s potential, and 31% feel confident using the tools, while only 10% say they’re intimidated. Exposure is what builds that confidence: 43% of workers at AI-using organizations are excited about it, against just 11% at organizations that don’t use it.
For leaders, this is a governance problem hiding inside a productivity story. When 22% of workers are using AI informally with no approved tools, you have people pasting company information into whatever chatbot they found, with nobody watching what goes in. Enthusiasm follows from access and training. Give people approved tools and real instruction, and the fear mostly takes care of itself.
Frequent Movers Ramped Up in Two Months, Not Five
A resume full of short stints has long read as a warning sign, on the assumption that a job hopper won’t stay and can’t be relied on. A new Harvard Business Review study says that instinct may be costing employers good hires. Researchers Rebecca Kehoe of Cornell’s ILR School and F. Scott Bentley of Rutgers analyzed the employment histories and performance of 8,693 U.S. hedge fund managers across 2,129 firms over 15 years (Harvard Business Review, July 29, 2026). Almost everyone took a performance hit when starting at a new firm, but people with four or more prior moves rebounded to their baseline in about two months, against roughly five months for their less-mobile peers.
Their edge comes from practiced adaptability rather than raw technical skill. People who’ve changed jobs several times have gotten good at reading a new culture quickly, building relationships fast, and figuring out the unwritten rules of how a place works.
Here’s the practical read: ramp time is money. If a frequent mover hits baseline in two months and a “safer” candidate takes five, that’s three months of the steadier hire’s salary spent getting to the same place. This is hedge fund managers, a high-autonomy, performance-measured world, and whether the same gap holds for a team lead or a nurse manager is an open question. And faster ramp-up doesn’t answer the retention worry, since someone who left four times quickly may leave you quickly too. The smarter takeaway is simple: stop using job count as an automatic filter, because you may be screening out the people who are best at exactly what new hires struggle with most. If you’re the one doing the moving right now, our open roles are worth a look.
