You Have More Hiring Power Right Now Than the Headlines Suggest
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May’s reading held at 122,000. April came in at 105,000, revised, and March at 61,000, revised. Line up those four months, and you get a bumpy, softening trend rather than one bad month.
The gains were lopsided again. Education and health services carried June with 48,000 jobs, more than the rest of the services sector combined. Trade, transportation, and utilities added 15,000. Financial activities added 14,000. Information added 7,000. On the goods side, natural resources and mining and manufacturing each added 5,000, with construction up 2,000. By company size, small businesses with 1 to 19 employees added 38,000 jobs, the biggest single bucket, while companies with 500 or more employees added 25,000.
The weak spot was leisure and hospitality, which added just 2,000 jobs, the sixth straight month of weak hiring in the industry that covers restaurants, hotels, and travel.
98,000 is the kind of number that doesn’t scare anyone but should get your attention. Job creation is still positive, and the engine is running on fewer cylinders every month, with the same cylinder doing most of the work. Strip out education and health services’ 48,000, and the rest of the economy added roughly 50,000 jobs across every other industry combined. When one sector carries that much of the load, the headline looks healthier than the job market actually feels to someone trying to get hired.
Leisure and hospitality is the tell. Six months of weak hiring in the industry that hires fast, hires seasonally, and hires a lot of entry-level workers is a signal worth reading closely. When restaurants and hotels stop adding people, it usually means they’re picking up on softer consumer demand before anyone else does.
ADP chief economist Nela Richardson put it plainly: “The pace of hiring is telling a story of both supply and demand. We know it’s taking people longer to find work, but there also are signs of labor supply constraints in certain industries. For now, the overall effect is a slowdown in job creation.”
I flagged a version of this same fragility in Glassdoor’s midyear numbers last week, a job market that looks stable in the aggregate but is running thinner underneath than the headline suggests. Today’s ADP number is that same pattern showing up directly in the hiring data.
For employers hiring right now, this is a good market to be patient and selective in. Take the time to find the right person instead of settling because a requisition has been open too long. For job seekers, it’s the opposite, and the ADP data explains why your search is taking longer than it would have a year ago.
AI Cuts More Jobs in Six Months of 2026 Than in the Two-Plus Years Before It
U.S. employers announced 45,849 job cuts in June, according to Challenger, Gray & Christmas, down 53% from May’s 97,006 and the lowest monthly total since December 2025. It’s also down 4% from the 47,999 cuts announced in June 2025. First-half cuts total 443,604, down 40% from the same stretch of last year.
The pace cooling is the headline. The reason behind the cuts is the story.
Artificial intelligence is now the single most-cited reason employers give for cutting jobs, both for the month (14,029 cuts, 31% of June’s total) and for the year (101,743 cuts, roughly 23% of all 2026 cuts). AI has led the monthly reason list for four straight months running.
Sit with the scale of that shift. Since Challenger started tracking AI as a distinct layoff reason in 2023, it’s been cited in 173,568 job cuts total. More than half of that entire three-year total, 101,743 of it, landed in just the first six months of 2026. Whatever was theoretical about AI and job cuts a year ago is showing up in real reduction announcements now, and the trend is accelerating rather than leveling off.
Technology led every industry again, with 15,503 cuts in June and 139,156 for the year, up 83% from the 76,214 announced through June 2025. Tech now accounts for nearly a third of every job cut announced in the country this year. Transportation sits second for the year with 40,970 cuts, up 387% from 8,419, as the sector absorbs higher costs and shifting trade conditions.
Hiring plans tell their own piece of this. Employers announced 10,933 planned hires in June, down 44% from May, but still above the 3,191 planned in June 2025. The year-to-date total of 91,405 is up 10% from 2025’s pace, though it remains a fraction of what companies planned before 2020.
“The pace of layoffs cooled considerably in June, similar to plans last June, and as is typical for summer months,” said Andy Challenger, workplace expert and chief revenue officer for Challenger, Gray & Christmas. “That said, the cuts we are seeing remain concentrated in technology, and artificial intelligence continues to reshape how companies think about headcount.”
I covered Oracle’s 21,000-job cut and the AI language buried in its own regulatory filing a little over a week ago, and this report is the macro version of that same story playing out across the entire tech sector. “Tech remains the epicenter of this year’s cuts,” Challenger said. “AI is the dominant force as companies are restructuring around it, automating roles, and reallocating budgets toward new capabilities. The sector is being reshaped in real time.”
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The Chicago Fed Says Unemployment Is Rising Because Fewer People Are Getting Hired Back
The Chicago Fed’s real-time forecast puts the June unemployment rate at 4.36%, a step up from the BLS reading of 4.30% in May and higher than the 4.14% recorded a year ago. This estimate lands ahead of Friday’s official BLS jobs report.
I flagged this same indicator two weeks ago when it forecast June at 4.33% mid-month. Today’s updated 4.36% reading, coming closer to Friday’s official number, shows the softening continued rather than reversed as the month closed.
What’s driving the increase matters more than the headline number. The Chicago Fed tracks two component rates: one for layoffs, one for hiring unemployed workers back into jobs. Layoffs barely moved. The Layoffs and Other Separations Rate ticked up to 2.08% from 2.05% in May, and it’s flat against the 2.08% recorded a year ago. Hiring is where the softness shows. The Hiring Rate for Unemployed Workers fell to 44.45%, down from 45.69% in May and 45.38% a year ago. Fewer people who lose a job or leave one are finding their way back into work.
The Fed’s own momentum gauge reads +31, in “Lean Increase” territory, and the model puts 52% odds that Friday’s official unemployment rate rises, 27% that it holds, and 21% that it falls.
Three labor reports landed this morning, and they all point to the same thing. It’s a hiring problem more than a firing problem. ADP showed private hiring slowing to 98,000 and narrowing to one sector. Challenger showed layoffs cooling overall, with the cuts that do happen increasingly tied to AI rather than broad economic weakness. Now the Chicago Fed is forecasting unemployment ticking up to 4.36%, and its own data says the reason is fewer people getting hired back, not more people getting laid off.
It’s the labor market that a lot of people are actually living in right now. If you have a job, you’re probably keeping it. If you’re looking for one, the door is narrower than the low layoff numbers make it sound.
For employers, this is a hiring market that rewards patience. Candidates have fewer competing offers than they did six months ago, which means you can afford to hold out for the right fit instead of the fastest one. If you need help finding that fit without slowing down your timeline, that’s what our staffing team is built for. For anyone out of work right now, the honest read is that re-entry is the hard part, and Friday’s official number will show whether June made that harder still. See what’s currently open while you wait for that report.
