July saw payrolls grow by just 73,000, falling short of estimates, while the unemployment rate rose to 4.2% as the labor force weakened. Job cuts surged by 29% from June totaling 62,075, marking a 140% increase compared to July 2024. Almost half of these job cuts were attributed to AI and technological updates. The report indicated that these reductions exceeded averages from previous years, highlighting the ongoing, profound impact of technology on the labor market.
Employers across the U.S. announced 62,075 job cuts in July, a 29% increase from June and a 140% surge over July 2024, ending the typical midsummer lull.
Nearly half of the job cuts, 49%, were related to artificial intelligence and technological updates, reflecting deep changes rippling through the labor market.
The cuts this year are well above the average since the pandemic, evidencing that technology-driven changes are impacting employment significantly.
Challenger Gray suggests that while surging layoffs are linked to AI adoption, cutbacks in government employment significantly contribute to the current employment landscape.
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