Labor Signals

What forces are shaping our reality?

1. We have to put sales growth on the slide decks and annual plans but the real focus is around margin protection (especially for companies impacted by oil/energy prices) and freeing up cash for AI OpEx.

2. The labor force is shrinking due to retirements, negative net migration (more people leaving than coming in) and more people opting out entirely. That lowers the “breakeven number” of new jobs needed to keep headline unemployment numbers low.

3. In most cases, employers have the leverage and are moving to more long term and performance based incentives over salary compensation.

BLS reported +162k added for August. ADP which we check for private payroll data confirmation (and is also based on their own data vs the slice/sample the BLS uses) came in at 38k which is much more aligned with the sentiment. That 3.3 to 1 gap is the largest one this year. Government jobs did drive a pop in the BLS number especially at the local level which explains some of the discrepancy but not all.

Industries that they each have as growing:

• Healthcare (as usual)

• Leisure & Hospitality (surge on the BLS side, moderate on ADP)

• Construction (moderate)

Industries with discrepancies:

• Manufacturing (+16k in the BLS and -17k in ADPs data)

• Professional & Business Services (BLS flat, ADP -16k)

July JOLTS report reinforced meh conditions. Hiring dropped 294k. Normally hiring falls because either workers stop quitting (so fewer backfill roles open) or employers start firing (so demand collapses). Neither happened. Quits and layoffs both held basically steady. Essentially that means employers pulled back on new hires and held off on backfilling attrition.

On the AI x Jobs front there’s promising new article from The Economist listing 700k-1M jobs created by AI (they don’t break it out but it’s more capex than productivity so far). This is another example where jobs aren’t quite the right measurement. AI can create electrician, data center technicians and heads of AI jobs at the same time that it absorbs meaningful chunks of work inside of existing white collar jobs. Developer hiring only turned positive in 2026 after 18+ months below trend. These numbers don’t tell a clear story of productivity vs. implementation investments (or failures) yet. This is the outcome of the surge in initial investment.

We shed 23k jobs with additional downward revisions for May/June (over 100k down). U-6 unemployment remained unchanged but that was due to so many people leaving the labor force entirely. Fewer people looking for work makes the unemployment rate drop even as employers cut headcount. Not a win.

Healthcare continued to add but at a lesser pace. Construction saw a good month as did professional & business services.

Overall, sentiment is falling and stubborn energy costs keep inflation too troublesome for rate cuts.

June 2026: didn’t meet estimates.

57k jobs added which was less than half of estimates.

Interestingly, professional and business services trended up (36K) and healthcare/social assistance continued growing. Hospitality had a weak month with lower than usual seasonal hiring. The big miss from estimates was in that seasonal hiring and less hiring than expected for the World Cup.

APD which gives us insight just in the private sector landed at 98k jobs. Also coming in under their estimates.

Why The BLS to ADP differences?

BLS seasonally adjusts against the summer hiring ramp it expects each year. When actual hiring falls short of that ramp, the adjusted number goes negative even if raw headcount rose. ADP's model doesn't carry the same seasonal drag and its sample is payroll clients vs. a stratified establishment survey.

They both show us that we didn’t maintain the May pop. April and May were revised down 74k total.

A rate cut doesn’t seem to be on the table. There was some discussion of a rate hike and then these job numbers cooled it. The Feds next moves will hinge on incoming inflation data.

A few counter narratives to AI job replacement hit this month:

• Ford rehires 350 engineers citing AI as insufficient to replace them. (That’s true and don’t miss that Ford has laid off significantly more than 350 workers and their industry is under real demographic headwinds.)

• Ramp data shows heavy AI investments led to more hiring not less. (That’s true and don’t miss that those gains were Information/Tech where it’s quite easy to see how AI makes their core work cheaper to do. The study didn’t show the same yet in manufacturing, healthcare or elsewhere yet.)

172k jobs added in May 2026. Handily beating expectations. While healthcare continued as a powerhouse, this month did see more spread across sectors (with a pop in hospitality!) which is more reassuring.

The number of jobless less than 5 weeks declined by 286k to 2.2 million in May (so more activity happened) which offset an increase in the prior month. The long term unemployed held steady. March and April were revised up by a combined 93k. 

ADP (which gives only their private payroll data) confirmed the BLS directionally and showed gains on all company sizes. 

What’s going on with AI layoffs? The gap between vision and reality is wide. 
I have yet to have a single conversation where the team and the execs are well aligned on AI. I’m hearing about C level execs thinking of people and agents as literally 1:1 like one agent does ten different job (yikes). Uber is a great example of “adopt at all cost” getting quickly edited. I’m also hearing about other execs who don’t quite get it yet while their department is the number one user in pilots. 

Its surface level “full steam ahead”and behind the curtain things range from hemming and hawing about flipping AI features in an existing SaaS license to truly restructuring entire ways of working.

In general this feels symptomatic of where we are in the adoption curve. Increased individual productivity is easier. Increased departmental or organizational productivity takes a deep understanding of complex workflows and the appetite for restructure. It takes a real hunger for accountability. 

The pressure for ROI is building. The boredom and distaste is growing. The doom narrative has already lost steam even from its originators (conveniently just in time for their IPOs).Where this hits jobs is that the AI-only-ever frenzy of late 2025 is morphing into some latent hiring for companies realizing what their journey might entail and just how many people they might need to get them there.

The cuts aren’t done yet. Rolling layoffs are very costly but becoming more normal. We won’t have the updated May JOLTS report for another month but April showed Quits and Layoffs steady.

Overall, there is a growing pragmatism emerging.

The Headline Sounds Good

115k jobs added in the April 2026 BLS numbers exceeding estimates of 55k-70k.  February was revised down further to -156k jobs. March still held up including latest JOLTS report alignment and a slight upward revision.

We're still relying heavily on healthcare (+37k), transportation and warehousing (+30k) and retail (+22k).

More of the Story

1. Part-time for economic reasons (AKA stuck at part time) rose 445k in a single month. Hours are the leading indicator. Headcount is the lagging one. 

2. The share of total unemployed that are long term unemployed is sitting at 25.3%. For reference, in the great recession this number peaked at 45.5% and stayed above 40% from Dec 2009 to 2012. Shortly pre-pandemic it was 19% or so.

   That proportion has climbed from 20.4 to 25.3% in roughly 24 months. The absolute number held flat at 1.8M in April but the share kept climbing. In a healthier market that pool drains as people find work. It's not draining.

3. Year over year, Q1 layoffs outside of tech are down 50%. In tech they’re up 33%. AI was the top listed reason but still only part of the story.

Size Matters

ADP’s numbers directionally confirmed the BLS report but the most interesting breakdowns were by size: 

Jobs Added by Size 

• 1-19: +43k

• 20-49: +22k

• 50-249: +5k

• 250-499: -3k

• 500+*: +42k

Wage Growth by Size

• 1-19: 2.5%

• 20-49: 4.1%

• 50-249: 4.7%

• 250-499: 4.8%

• 500+: 4.8%

Pressure is showing up in the middle. Bigger firms have cash for AI and talent. Small firms stay nimble. Mid-market has neither edge. Their wage gains are nearly the same as enterprise but they've stopped adding much new headcount. That leaves many in a tough spot between not enough cash to absorb AI OpEx and not small enough to pivot fast. They’re often the most exposed to tariffs. So they freeze hiring and protect who they have.

*ADP groups everyone 500+ as Large which lumps some mid-market in with enterprise. The squeeze likely runs deeper into the 'Large' bucket than this shows.

AI is NOT the Only Story

• Non-profits have historically been around 5.3% of our GDP with 12.7M employees. For comparison, consider that construction has been 4% with 8M workers. Retail is only slightly higher with 5.5% of GDP and 15.5M workers. A third of nonprofits reported experiencing federal, state or local government funding disruptions in early 2025. That has only accelerated with grant cuts. How many will run deficits or deepen cuts is a meaningful TBD. 

• Tariffs and the Iran energy shock are stacked up together. Tariffs already pulled 2025 hiring down with import-exposed sectors cutting first. Full court decisions implications and refunds remain unresolved.  With the Iran War freight and utility costs are squeezing the same firms still absorbing tariff impacts. And the same worried consumers buying their goods. The full ramifications will take awhile to play out but they’re hitting companies already under margin pressure. 

• The federal government cut another 9k in jobs in April. Since its peak in October 2024 federal employment is down 11.5%. The scope of Federal workers is roughly the combined US workforces of Walmart and Target. 

Labor Signals → Real Life Decisions

CEOs are pushing either all in on the same team and adding AI like Spotify (more output per person) or cutting headcount and adding AI like Block (more output per person). In either case the emphasis is on more, more, more.

Attempting both at half speed is usually the worst option. 

Questions to ask: 

1. Can I name the two or three functions in my business where output per person or value per labor dollar has actually moved this year? And the ones where it has not?

2. With 25.3% of the unemployed sitting long-term and tech layoffs up 33%, am I using this market to concentrate top talent in those functions, or just freezing in place?

3. When a seat opens is the default to post the role, “try AI” or to actually trace the workflow and outcomes end to end? 

The headline gain is +178k jobs in March. These beat expectations. The gap between expectations and reporting is often more meaningful to markets than the actual numbers.

The context that deflates the party balloons:

• February was quickly revised down to a loss of -133k (bigger than originally reported) while January was revised up a bit bringing the 3 month average to 68k.

• The big Kaiser Permanente strikes that pulled down February healthcare numbers ended so our primary growth industry came back online. But not due to massive exciting growth. Just due to people getting back to jobs that already existed. Healthcare in general continues to grow because of demographic demand not economic cycles.

• Warmer weather (and data centers) gave a +26k boon to construction roles.

• White collar payrolls have now contracted for 29 consecutive months.

U-3 unemployment (the rate we say in headlines because it’s the smaller group of people actively looking for work) stayed steady at 4.3% but only because more people gave up on looking for work or have not looked recently enough to count for the numbers. When the “actively looking” pool gets smaller, so does that number. U-6 (the real rate we use here) jumped up to 8% where you see those disaffected workers counted.

As the labor force shrinks, the breakeven number of jobs needed to keep unemployment low is falling. A recent Dallas Fed report would give that credit to new net negative immigration meaning more people leaving than coming in. That’s certainly part of the story. But if immigration were the primary driver, you'd see the biggest job losses where unauthorized workers are most concentrated. You don't.

Estimates of the new breakeven number range from less than 10k/month from the Federal Reserve Board to 15-87k/month from St. Louis Fed and even as low as -3k/month from the Dallas Fed report. The labor force is shrinking faster than jobs are disappearing which is why unemployment looks largely stable. Actual economic growth then has to come from productivity instead of labor. This is where AI optimists live

A loss is always a bummer but an unexpected loss really startles markets. This really shouldn’t have surprised us. Healthcare has been the saving grace of most of these reports for at least the last year. Kaiser Permanente strikes (now concluded but as large as 31k workers) hit that sector hard and emerging weaknesses elsewhere were more obvious. Headlines are showing U-3 unemployment only slightly up (4.3% to 4.4%) but the U-6 jump (the one that shows people stuck in part-time and giving up on searching) had a more visible move from 8.0% to 8.4% month over month.

Anthropic had a big month showing everyone how tricky these AI ethics can be with the government and dropping a scary looking chart of which jobs could be replaced by AI. Hint: It’s mainly the office ones like tech, business, etc. The big blue section of that graph is theoretical exposure. The tiny red part is observed exposure.

This is great timing and narrative convenience for a company positioning themselves as the more trustworthy ushers of AI. The more scary and inevitable AI seems, the more you need to trust one. And Anthropic has solid public support right now for being anti-autonomous weapons and mass surveillance thanks to their willingness to lose their government contracts and push back. That’s not to say these roles don’t have AI exposure or that the risk shouldn’t be measured. Of course they do. But the rest of the report shows much smaller impacts when comparing AI exposed to non-AI exposed roles so far outside of new additions. That lack of new job additions (vs huge cuts though smaller layoffs continue) has created the weakness we feel today in the white collar job market.

At the same time that many of these spaces could continue to stall or even shrink, we’ll have more and more Boomers retiring without the up & coming population to replace them. For many positions, AI is only increasing the scope, scale and speed of the work vs. cutting their role. This is especially true at smaller companies.

Yes, take AI seriously. Prepare yourself, your team and your career for how AI will impact your work. But no, don’t look at one chart and panic.

The BLS report is back post stressful shutdown. According to their numbers, 64k+ jobs were added in November 2025. Healthcare and social assistance continue to the be the driving engines behind growth. Construction also had a pop in this month with speciality trade contractors adding 19k+.

ADP data (reminder - their payrolls so smaller overall dataset but very deep understanding in that set) shows a net loss of -32k jobs in November. Most striking is the distribution of those losses:

• Small (1–49): -120k

• Medium (50–499): +51k

• Large (500+): +39k

What that pattern usually means in real life:

1. Small businesses are reacting faster.
   They pull back on hiring quickly when demand feels uncertain, cash gets tighter, or financing costs bite. A net decline in SMB payrolls often shows up before it becomes obvious in headline narratives.

2. Mid-size and large firms are still selectively adding.
   Not “hiring like crazy,” but they have more ability to keep hiring in pockets (backfills, revenue roles, regulated or essential functions). That aligns with a “cooling, not collapsing” labor market.

3. Wage pressure is also different by firm size.
   Smaller employers are showing more modest wage growth (1–19 employees: 2.5%) than the higher mid/large firms (roughly 4.7%–4.9% in larger buckets)

While the BLS vs ADP split tells us the private market is tightening fastest at small employers, there is a parallel labor story building in nonprofits and human services, driven less by “demand for labor” and more by funding mechanics. The nonprofit sector is the 3rd largest employment sector in the US and employs just under 10% of all private sector jobs. With cuts to funding, layoffs in this sector are up over 400% year over year.

So why do people keep calling this market “resilient”? GPD is still in growth mode. Consumer spending is holding up despite falling sentiment. Unemployment while up a bit to 8.7 for U-6 (the better measure) and up a bit at 4.7 for U-3 (which that misses people giving up or stuck part time). These are still highs and climbing. But they are not the 5.8-10% (and that’s U-3!) in 2008/2009.

On the ground we’re still seeing clients with pent up demand for roles that were held in 2025 but looking increasingly necessary in 2026. AI is still real and coming but in most cases the organization, the tech and the state of their data aren’t mature enough to fully replace entire roles.

There are pockets, companies, teams and people doing extremely well. There is broad unease.

Leverage remains broadly with employers but Q1 will be extremely telling.

The shutdown drags on so we can’t share any official BLS numbers but the bigger story should be the impact of this shutdown overall:

1. Reporting paralysis.
   With federal data delayed, no one can see the full picture. Leaders are flying on instinct instead of insight. It’s slowing hiring decisions because CFOs don’t want to move without trend confirmation.

2. Contractor pain and company strain.
   Federal and adjacent contractors are missing paychecks, but the ripple hits private employers too. When people feel uncertain about government stability, they hold onto jobs longer and stop spending. That freezes movement across entire markets.

3. Policy whiplash and planning fatigue.
   Every time Washington stalls, employers tighten. HR and finance teams who just rebuilt stability after the pandemic are back in wait-and-see mode. It’s not just about the lost weeks of work; it’s the erosion of confidence that lingers after.

4. Slowdown across travel and food systems

   With TSA and FAA workers out, flights are being canceled and delayed across major hubs. Deals that rely on face-to-face meetings are slipping, tourism dollars are evaporating, and service economies in travel-heavy cities are taking the hit first. On the ground, food programs tied to federal systems are strained, creating ripple effects for distributors, schools, and hourly workers who rely on those networks. It’s a reminder that when government stops moving, the entire flow of the real economy slows with it.

We can still use the ADP data to see the shape of the labor market. While healthcare and education pulled us into a 42k jobs addition, layoff trackers are once again spiking.

The government shutdown means our friends at the BLS are not online to provide reporting at the moment. More unknowns to add to a wild ride of a year.

According to ADP, U.S. private-sector employment fell by 32k jobs in September. They reported losses across most service sectors (professional/business services, leisure/hospitality, etc.) with a few pockets of resilience (health/education).

Carlyle’s labor report (a “shadow” report based on their portfolio companies and real estate holdings) estimates a net gain of 17k jobs for September.

Both reports have their limitations for example they don’t track any public sector jobs but they’re fairly aligned in their outcomes. A spread of 49k jobs is a relatively tight window. They both give us a sense of a stalled market even if one is technically in the black.

The estimates for September prior to the shutdown were about 50k jobs added. Here’s hoping we get to confirm that soon with a government back in action.

Either way, leverage overall still sitting with employers in a noisy market.

These numbers are not surprising to people in the market. They match what many candidates have already been feeling. Fewer interviews. Slower processes. More qualified people chasing the same roles.

We added only 22k jobs in August. Expectations were closer to 75k. Downward revisions also continue with a headline grabbing 1M downward (ok technically 911k which kinda sounds worse?) revision from earlier in the year. The BLS flipped June’s numbers from a gain of 14,000 jobs to a loss of 13,000. June layoffs were also revised higher in the latest JOLTS report. Even healthcare, previously the most reliable sector, is slowing. The job openings rate in healthcare dropped to 5.1% in July which is down from 5.8% in June and 6.3% a year ago. Leisure and hospitality continues to hold strength despite broad softness in the labor market. In August, that sector added 28k jobs, outpacing its prior 12‑month average of 19k.

U-6 unemployment, which includes underemployed and discouraged workers, ticked up to 8.1%. That is the highest level since early 2022.

This is not 2008 but it’s not fun either and the pressure for rate cuts rises.

What this means for leverage…

Hiring power is shifting back toward employers in many sectors. But it is not a full reset.

• Top talent still has options. Especially those who combine deep domain skill with AI fluency.

• Offers are getting more scrutiny from that top talent. Culture, leadership, and role clarity all matter more than last year.

• Execs are reshaping roles while hiring.

We are seeing more teams pull back on hiring not just because of budget but also because they are realizing the roles themselves are unclear. That hesitation is a signal.

This is exactly why we’re having more conversations around the future of the org chart. It’s not enough to just “hire less” and “use tech more”. The reality is more complicated. Because the org chart is not just a headcount plan. It is a reflection of how a business creates value. And if you are hiring into outdated assumptions, teams end up adding weight without leverage.

If your team has foggy roles, duplicate functions, or project handoffs that always stall, your org design is probably the issue. Not your people.

This is fixable. And this is the window to fix it.

What should be bigger news…

The latest BLS projections show the job market is expected to grow just 3.1% over the next decade. That’s a sharp slowdown from the 13% growth we saw in the previous decade. Healthcare is expected to drive nearly half of the new roles. If GDP keeps rising, productivity per worker will have to go up fast or companies will be forced to do a lot more with the same headcount.

Why the slowdown?

• Demographics: Boomers are retiring, and there aren’t enough younger workers to replace them at the same pace.

• Falling labor force participation: Fewer people are working or looking for work, including younger men and prime-age women in some sectors.

• Technology and automation: Companies are solving more work with fewer people + AI

• Slower population growth: Immigration has been inconsistent, and domestic population growth is flat in many areas.

• Efficiency mindset: After over-hiring in 2021–2022, many leaders are focused on doing more with less. They’re not rushing to rebuild bloated teams.

For workers who provide an outsized impact in their role, this will heighten their leverage either way. For general labor, if productivity is enough to keep demand high then leverage will move back to employees who would be a smaller and more in demand group. But if productivity doesn’t create enough demand you’ll see leverage remain with employers.

We're entering a phase where every seat needs to earn its place. Not in a ruthless way, but because the margin for inefficiency is shrinking. Leaders have to be clear on which roles move the business forward and what support or systems those roles really need.

That is a tough combination with an increasingly disillusioned workforce.

The winners of this next decade won’t win though fear. They’ll win by unlocking the best of what people, AI and the combination of those two forces have to offer.

If July numbers hold around the estimated 73k jobs, the monthly average for this summer will fall to 35k/month. That’s very weak and outside of the pandemic - the worst since 2010.

The big news is the correction with May & June revised down 258k jobs. Corrections in general are quite common as the data takes time to be solidified. But this is a big one.

May: 144k → corrected to 19k jobs

June: from 147k → corrected to 14k jobs

The fact that the labor market has been cooling is not surprising. Even without the revisions, growth has been driven by healthcare, social services and state governments jobs. Those are jobs of unwell necessity not economic engine. In May, this update covered why a shrinking labor force creates both low unemployment and rising wages. That isn’t anything to get excited about.

So, why the big correction?

1 - Critiques of the data in general are valid.  Overall, surveys in are harder to rely on due to low responses. The stated numbers are a combination of establishment/payroll and household surveys. Then they adjust for late responses and do benchmarking like comparing to tax records.  The methods aren’t perfect, but if they’re used consistently, they can still provide useful signals when combined with on the ground perspectives. It would be great if we improved the methodology but that would take some political courage from both sides. There’s a reason the government (under both parties) pushes U-3 unemployment which leaves out totally discouraged & stuck in part time workers.

2-  The BLS uses a seasonal adjustment model to remove predictable fluctuations in employment data, such as holiday hiring or summer school breaks. It relies on historical patterns to estimate what a typical month looks like and adjusts the raw job numbers to reflect that baseline. If current conditions break from those patterns (hello 2025) the final totals require correction.

3 - Businesses are both forming and closing faster rates which creates lag and confusion in the data. Those entrants and deaths impact the modeling.

Now the firing of the BLS commissioner is putting a spotlight on motivations from all sides. That firing is not going to change the numbers and has only put more eyes on the correction.

Will rates come down and reverse this weak market? I hope so!

Other potential upcoming impacts include:

• Tariffs. The unknowns are high and unknowns = slower hiring. Teams correcting their plans weekly or even daily in some cases (as many are forced to do right now) do not take on new salaries. If these numbers could stabilize (even if high) that would help reduce uncertainty. According to McKinsey, most consumers are already planning on cutting spending as a result.

• Rates. The pressure is high to reduce rates but that won’t come until September.

• Taxes. The latest “big beautiful bill” restores the ability to fully write off R&D expenses rather than amortizing them including retroactive adjustments. This change will free up significant cash for many tech companies. A quick reminder: “tech companies” doesn’t just mean Microsoft. It also includes small teams of hardworking small business owners who are not sitting on millions of dollars.

• AI. We're already using AI to enhance work, and we're now approaching a phase where AI starts replacing jobs. In theory, the productivity gains should drive new economic growth. But that growth is most likely to benefit those who can keep up with the pace of change.

The US added 147k jobs in June with growth continuing to be driven by healthcare with bumps in state and local government. Total private-sector hiring slowed to +74k. While the headlines say unemployment dropped, that had more to do some government roles rehiring and the overall labor force shrinking than it did with economic strength. Tech and finance/accounting were relatively flat month over month. Employers continue to hire very selectively in highly specialized roles which makes things especially tough for recent grads and other generalist workers.

Microsoft and others continue large layoffs as they bet more on AI infrastructure. The unspoken “terms of work” have shifted and both employers and employees are willing to make unpopular decisions. Take for example, the big story of the moment of Sohem Parekh, a serially over-employed engineer, who made his way through multiple YC companies. Someone working multiple jobs isn’t really a brand new concern but the willingness of so many founders to name and shame him publicly is new. That willingness is an interesting blend of the ever increasing push for “transparency” from workers and the deepening dissolve of trust between employers and employees.

On the AI front, Derek Mobley, suing Workday for discrimination has been granted a class status for his lawsuit. This is just one example of AI integration meeting laws around discrimination. As more companies look to integrate AI, the clarity around what data it is trained on and what decisions it can make is still hazy.

The US added 139k jobs in May, and once again, healthcare did the heavy lifting, accounting for 62k of those jobs. That sector alone is keeping the overall growth number steady.

Headline unemployment (U-3) held flat at 4.2%, but the broader U-6 rate inched up to 7.9%. U-6 includes people working part-time who want full-time work, along with those who have stopped actively looking. That uptick reflects what many of us are seeing:

• More people being pushed into part-time roles

• A decline in labor force participation, now at 62.4%

• A small increase in discouraged workers

A key piece of context is the breakeven jobs number, or how many jobs we need to add each month to maintain the current unemployment rate. Before the pandemic, that number sat around 100k to 125k per month. But as immigration slows and population growth softens, Brookings now estimates breakeven is closer to 70k. That means:

• Fewer people in the labor market

• Fewer jobs needed to keep unemployment rate low

• Fewer hires being made

This is how we find ourselves in a market where unemployment stays low, wages still rise, and yet the job market feels meh. It is not about volume anymore. Companies are hiring less and focusing on senior, highly specialized roles in areas like AI, cybersecurity, and infrastructure.

That shift is especially hard on recent grads. According to the New York Fed, unemployment among 22- to 27-year-old graduates rose to 5.8%, the highest since 2021. Even more telling, 41.2% of employed graduates are in jobs that do not require a college degree. AI is absolutely a component there as it becomes the new “junior” member of the team.

April 2025 brought in 177k additional jobs. February and March were revised downward a combined 58k jobs. Revisions are common and happen in both directions.

As usual, the bulk of growth came from healthcare at 51k jobs added. Transportation and warehousing saw a spike of 29k jobs with companies rushing to import/buy before tariffs hit.

Tech had another meh month with a net loss of 7k jobs. Jobs around data storage/architecture and machine learning did hold strong.

Finance continues to be in recovery with 14k jobs added. Related note, our annual midyear hiring survey focused on finance and would love your feedback. Early and detailed responses will be provided as a thank you for taking!

Declines continued in government roles, retail, manufacturing.

Overall, we’re just sitting in a lot of “wait and see” with anxiety around AI, tariffs and recession up. In good news, this full on AI only company definitely missed humans. But leaders are getting more real with their intentions are getting more real with their intentions around it. From DuoLingo to Fiverr the urgency is high to adapt.

Whew.

228k jobs added in March. So, yay? Gains continued to come from a few usual suspects including healthcare (+54k), social assistance (+24k), transportation (+23k) and retail (+24k). These numbers are the counts in the middle of the month so remaining federal cuts and tariff impacts are definitely not in there yet. Federal jobs down another -4k in March with another -11k being adjusted for February.

Most of you are here for tech or finance news. Here’s where we’re at there:

Tech saw a drop of -29k in March (quite a bit due to telecommunications cuts) with a slight uptick in postings for roles overall. Layoffs continue and I urge us to consider this the “new normal” for the foreseeable future. Gone are the days of cash being the only impetus behind layoffs. Competition is tough for entry level workers overall and tech is no exception. From 2023 to 2024, the percent of employed workers 20-29 with a recent bachelor’s degrees fell from 76.4% to 70.2%. There are still a lot of unknowns for 2025 grads but it will take some major trend reversal for them to land into a welcoming market.

Finance was relatively stable. We’re seeing steep inclines in the technical skills (for example Python, SQL etc.) and business acumen (for example strategy) beyond day to day accounting or modeling skills.

The bigger question is probably less about what did happen and more about what’s going to happen with these tariffs.

Will the tariffs last? Are they temporary? I wish I had that answer! What I can say is what we can expect for talent in uncertainty:

1. Final decisions slow down but changes in direction accelerate. It both takes longer to get to a final decision and along the way more changes pop up.

2. People are crankier. We don’t say this or talk about it enough. There is a palpable vibe shift and people’s tolerance for taking even small chances as a hiring manager or candidate fall.

3. Top talent hunker down and are more resistant to making moves. It typically takes more effort to pull someone extraordinary out of their current gig.

4. Noise goes up with more applications, more talking about the economy and more effort required to achieve the same outcomes. 

There are so many short term unknowns that it would be easy to lose sight of some bigger picture trends that are also moving right now.

For one, trust continues to deteriorate between employers and employees. Consider this story of a student kicked out of Columbia for building and utilizing a Leetcode interviewing ____ (this is the part where depending on your view of this you call it either a tool or a cheat). Is this a story of cheating plain and simple? Or is it the splintering of a dated system of evaluation? I know as many employers who would see this as a sign of hustle as I do who would ban this person immediately. It’s not unreasonable for teams to want to vet their future teammate. But the more nervous employers are about the truth in that vetting, the harder they will make the evaluation. And the harder the evaluation, the more employees will take advantage of tools or resources to seemingly endless gauntlets of tests.

On the AI front, HCAST (Human-Calibrated Autonomy Software Tasks) is an interesting new measurement to watch from METR. This is a benchmark of how autonomous AI systems perform on 189 real-world tasks across machine learning, cybersecurity, software engineering, and general reasoning compared to skilled human baselines. Current AI agents succeed 70–80% of the time on tasks that take humans under an hour but succeed less than 20% of the time on tasks taking 4+ hours. At least according to their initial research, the length of tasks that AI can complete is currently doubling every 7 months. 

In the meantime, what is it like for people working with AI? Intuitively, we probably know it’s helping in terms of output but this recent study confirms that it’s not just helping with “efficiency”. Individuals working with AI produced solutions of the same quality as two-person human teams without AI. Both individuals with AI and two-person human teams out performed individuals without a teammate or AI. Participants working with AI reported higher positive emotions (excitement, energy) and lower negative emotions (anxiety, frustration) compared to working alone without AI. Teams using AI were about three times more likely to generate solutions ranked in the top 10% of quality compared to control groups. These advancements from AI enabled groups are further proof of our talent gap widening from our lowest to best performers.

151k jobs added to payrolls and the jobless rate rising to 4.1% but before we get too excited - this doesn't capture all of the federal jobs recently cut. The survey period is the payroll including the 12th of the month so cuts mid-Feb to March will appear in the March/April numbers.

The bulk of these 151k adds came from healthcare (67k), hospitality/food service (42k), government (52k - stay tuned here), social assistance (24k), construction (23k) & retail (19k).

So… societally we’re doing a little building. And a lot of getting sick, eating out and buying things or needing support. To me, that doesn’t read like underlying resilience.

Layoffs in February totaled 172,017 job cuts. This marks a 245% increase from the previous year, primarily due to DOGE cuts, canceled government contracts, trade war concerns, and bankruptcies.

More than anything else, these efforts regardless of your political stance are just a lot of unknowns. And unknowns mean: risk adverse hiring, top talent reluctant to make moves and quick changes.

AI is, unsurprisingly, not slowing down. There’s been a 12% jump in tech roles asking for AI skills since early 2024. VC remains in an AI frenzy.

143k jobs were added in January 2025. Gains continued to come largely from healthcare (+44k), retail (+34k) and social assistance (+22k). Upward revisions for November and December 2024 added a combined 100,000 jobs, reflecting a stronger labor market than previously reported.

IT continues to lag with a jump in unemployment from 3.9% in December to 5.7% in January. Big tech layoffs have continued. I see small rolling layoffs as the new norm almost independent of company performance. Yes, of course struggling companies will lay people off. But a layoff now doesn’t require economic hardship to consider or deploy. Bummer but true.

Anthropic dropped a really useful economic index of AI impact.

When we understand the broader trends, we can have a little more context for buzzy news stories like:

• Job postings for AI Agents only

• AI company says don’t use AI to apply (of note: also Anthropic!)

December 2024 job numbers came in at 256,000 well over the 160,000 that were expected. The biggest rebounds were in retail with healthcare and social services continuing to add jobs as well. Professional and business services & information jobs were up but by slimmer increases.

U-6 unemployment (the one that counts people who have given up! An important number!) fell a tiny bit from 7.7 to 7.5.

Overall, this brought the year to a close with approximately 2.2 million jobs added.

That feels pretty rough after 6.4 million added in 2021. And 4.5 million in 2022. And even 3 million in 2023.

But interestingly, it was pretty on par with 2016 at 2.2 million. And 2017 at 2.1 million. And even 2018 at 2.7 million.

Item The U.S. economy added 227,000 jobs in November 2024, beating expectations and showing a strong recovery from the previous month. October's job gains were revised up to 36,000 from 12,000, while September's numbers were also adjusted higher, from 223,000 to 255,000. Unemployment ticked up slightly but not a big jump.

Between the Fed dropping rates and a new year starting, optimism seems to be on the rise.description

Item descriptionThere are really two parts to every labor market report. How it went. And how it feels.

So, first up how it went: 

12k jobs added which is way under under the 100k estimate. 

The BLS noted that the Boeing strike likely affected 44k manufacturing jobs while hurricanes also likely held back the total. As usual these days, healthcare (+52k) and government (+40k) led the way in job growth.

U-6 unemployment (the rate that includes a broader definition like people who have given up or are stuck at part-time when they wanted full-time) held at 7.7%.

Ok, so about how it feels…

The Conference Board's latest surveys saw a decent swing in consumer confidence. For example, the Expectations Index—based on consumers’ short-term outlook for income, business, and labor market conditions—increased by 6.3 points to 89.1. More people said they were up for making big purchases and there was a 12% increase in the amount of people who said jobs were “plentiful”. 

Could less layoff news be influencing sentiment? 

Layoffs haven’t stopped entirely (see: Dropbox again) but Layoffs.FYI shows a strong decline in tech layoffs  overall since peaking in Q1 of 2023. In October 2024 just over 3k employees were laid off. In October of last year, that number was 8k.

And as noted in previous Leverage Index updates, here tech layoffs tend to be very visible because tech workers are both unaccustomed to them and use social media more.

For example, a Metricool study analyzing 2,643 accounts in these sectors found a total of 207,796 posts, with each account typically posting around five times per week. That same study looked at 4,722 manufacturing accounts and found 144,425 posts, with each account posting approximately twice per week. 

Elections have always had a way of producing hesitancy for enterprise hiring decisions. And this one is no different. At the same time, people are feeling the tension and getting texts and calls every other minute to get their vote.

Personally, I won’t be changing course due to any of this election x hurricane x major strike soup until we have more information. And I don’t see any of this as enough to shift leverage at a macro level.

As AI agents gain in skill, more companies are sharing their real numbers for job augmentation and replacement. CB Insights released an AI Agent report in which a Director of Marketing from an ecommerce brand is quoted on Sierra: “My stretch goal for everybody is 4.75/5 CSAT. We're consistently seeing the AI agents and our human agents deliver around a 4.5.” with a 60% resolution rate without human involvement.

Klarna’s CX agent was doing the work of 700 customer service agents as of February of this year. Given that’s been training for the last 8 months, one could assume that number has increased.

3M people in the US work in Customer Service today and while not all jobs will be replaced, leaders, educators and politicians should be thinking today about what reskilling could look like.

The BLS reported 254000 jobs added in September. This came in over estimates but I disagree with headlines that the labor market is “roaring”. Growth continued to be driven by healthcare and government with additional gains from social services and construction. <—- not exactly signs of amazing consumer sentiment or spending. A recent Quantum Workplace report, which compiled data from 11,000 company engagement surveys, found that fewer than 75% of employees expressed high confidence in the statement: 'I believe this organization will be successful in the future.' This marks a significant drop in sentiment compared to the typical 88-95% confidence levels recorded between 2019 and 2022.

Workers are tired. So are leaders. Perhaps recent rate cuts, rapidly emerging efficiencies from AI or getting through the election will help to enliven things. But for now, it’s more of a sigh than a cheer despite decent numbers.

Unemployment saw slight declines across both key measures. The U-3 rate, which is the most commonly reported but less comprehensive measure, dipped slightly from 4.2% to 4.1%. Meanwhile, the U-6 rate — a broader and more useful indicator that includes part-time workers seeking full-time jobs and those who have stopped looking — fell from 7.9% to 7.7%.

NYT and Boeing strikes continue. A bold move by port workers paid off with a quick temporary resolution to allow more time for negotiations. Even outside of formal unions, employees banding together continues to rise. Will this survey showing Amazon workers want to work from home move the needle? I doubt it. But 30k workers rallying for change isn’t insignificant.

Just as election season momentum builds, the New York Times Tech Guild (their tech workers union) voted to strike while negotiations grow contentious. Some of their asks are clearly illegal such as more educational dollars based on race but will be very curious to see where things ultimately land in particular around just cause protections (the ability to let someone go for only certain reasons) and AI protection. The tech landscape that has criticized The New York times as being hard on founders and putting out “hit pieces” are watching with schadenfreude.

Boeing machinists have also entered a strike just as the company is suffering from lawsuits, bad PR and overall rough performance. A Jeffries analyst estimates this strike will cost the company 1.5 Billion for every 30 days of strike.

As worker sentiment continues to decline and trust in institutions erodes, I suspect we’ll see more and more of workers taking matters into their own hands with either formal unions or more likely informal coalitions and petitions. description

142000 jobs were added in August coming in under estimates and further making the case for hope around rate cuts. June and July were revised down by 86k. Revisions are common but these continued to reinforce sentiment that the job market is softer than ideal.

Unemployment ticked down a bit but that doesn’t necessarily mean more people found jobs. It could just as easily include more people giving up all together on searching. Unemployment rate as widely reported is a cross sample and not particularly reliable. The more accurate U-6 rate (a measure of labor underutilization that includes total unemployed, all people marginally attached to the labor force, and total employed part time for economic reasons) ticked up to 7.9%. That’s not great but not especially terrible. 2009 saw a U-6 of around 16% for example.

The job market continues to be particularly soft in professional services and technical roles which after 10+ years of roaring along are feeling that downward pressure. For white collar job seekers, it’s still a noisy and competitive market overall with many roles getting hundreds or more applications. In addition to a lot of talent actively on the market, more job seekers are using AI either to draft resumes and cover letters or even to apply automatically racking up 1000 applications.

It’s a particularly rough market for new college grads with “finance, insurance and real estate organizations planning a 14.5 percent decrease in hiring this year, a sharp U-turn from its 16.7 percent increase last year” among other sectors slowing down as well. New grads: I started my career in 2007 and recall 2008’s fear and upset so distinctly - hang in there!

The economy added 114,000 jobs in July 2024.

Unemployment rose to 4.3%, (up from 4.1% last month). This is the highest level since October 2021 though the uptick was due to an increase in labor force participation rather than an increase in people losing their job. The labor-force participation rate rose to 62.7% from 62.6%. Without the increase in participation, the unemployment rate would have stayed at 4.1%. A hurricane also hit seasonal/hourly work in July.

And yet, pandemonium ensued! 175k job had been forecast so that miss was upsetting. At the same time, Japan raised their rates above 0% for the first time in years. Traders had been borrowing in Japan and investing into US stocks so the combination led to a major sell off.

For those in a white collar job search right now, this likely feels more aligned to how they’ve been feeling. The professional level job market is crowded and incredibly noisy at the moment.

The growth numbers continue to come largely from healthcare (55k), construction (25k) and transportation/warehousing (14k). As seasonal work in construction slows down, will be interesting if we see a rate reduction from the Fed to buoy things.

On our end at Newance, we’re seeing a big jump in technical roles at the moment. It’s typical for us to see a rise in Aug/Sept hiring before another slow down in Nov/Dec. But each year now brings it’s own “typical”. description

The economy added 206,000 jobs in June 2024 with unemployment ticking slightly up to 4.1%.

So, why does this market sound good but feel bad for so many?

• 2021/2022 market was unhealthily HOT. The quick shift to layoffs creates an even bigger emotional dissonance of what it "should be like".

• That hot hiring market also pushed many professional level salaries way up right before rates jumped making capital also more expensive.

• Rising burnout + expensive capital = a resistance to employers hiring for potential.

• Low signal to noise for everyone. You can see *all of the jobs* and apply for *all of the jobs* and so can *everyone else* and thus people feel (understandably!) exhausted by hundreds and hundreds of applicants and applications. It is taking a big lift to get hired or to hire right now.

• The bulk of the job growth has been happening in healthcare & government sectors not professional services/tech/etc. Guess who posts on social about jobs?

• Views on certain news. I don’t have insider info on this but can anecdotally tell you that a post about layoffs and desperate job seekers gets approximately 10x the views of a post about anything else. Isn’t that interesting that bad news/emotional pulls would get a lot of engagement… kind of like… the news?

• Lowering trust in institutions and companies. Less trust leads to less hope.

• “Unemployment rate” is a specific measure from a cross section of households that is increasingly unreliable. For example, it doesn’t really include people who have all together given up on searching.

May 2024 added 272,000 jobs with continued growth in healthcare (68k jobs, monthly average have been 64k) and a significant jump in professional/technical services (32k, monthly average had been 19k). These outpaced estimates and were combined with a light tick up in unemployment.

AI is beginning to slow job growth in highly AI exposed industries. They are still growing but at slower paces. While tough in the near term, overall that may not be such a bad thing.

The sentiment in the job market (thanks algorithms for prioritizing those posts for engagement…) is certainly more negative with increasing anecdotal comparisons to the “great depression”. To be clear, white collar searches are definitely taking longer than 2021/2022 and employers are more reluctant to hire without a “perfect” fit. But the great depression saw an unemployment rate of 24.9%. That’s one out of every four people. Nowhere near today’s market.

Leverage remains with employers overall.

April added 175,000 jobs still driven by healthcare with another 31k in social assistance. Most sectors held fairly steady. Not exactly banner growth but it has people excited that rate cuts could be coming.

That would be welcome relief for businesses struggling with post-pandemic debt and individuals under record credit card debt. With rates high, this creates real strain to make a dent into any of that debt.

Specific to tech, tax relief remains stalled in the Senate after HR 7024 flew through the House with bipartisan support. The inclusion of the Child Tax Credit seems to be the sticking point but in the meantime, tech companies of all sizes (NOT just big tech!) suddenly have intense tax bills. To clarify — if a company spent $150,000 on salary they used to write that full $150,000 off as an expense in the year that it happened. When Section 174 expired, it defaulted back to a state where a company had to amortize that R&D expense over a number of years. So while they paid the $150,000 in cash that year, they pay taxes like they only spent a portion of that which creates a cash crunch.

Year to date, layoffs are down 4.6% from the same period in 2023. Can’t say it enough — we need to start expecting layoffs even in boom times because the implicit agreement that they were a “last resort” has been broken… and I don’t see anyone putting that back together. That being said, layoffs do have real cultural and productivity impacts beyond cash as Spotify’s CEO found out after their last RIF.

In big world of work news, the FTC has voted to ban noncompete agreements.

Noncompetes were once typical only for executives but have expanded in recent decades to be a default condition for most employees.

California, Minnesota and others already ban noncompetes. In most states today, only narrowly written noncompetes are currently enforceable.

Several groups representing businesses at large have already committed to fighting the ruling (for example the Chamber of Commerce) and enforceability will likely stay murky for bit.

My own view on this is that if you lead with trust, 90%+ of the time it will be returned to you in fairness and respect.

For now, expect employees to move more freely between competitors. This doesn’t apply to nonprofits (not managed by the FTC) or certain leadership roles as defined by compensation over $151,164 and in a policy-making position.

Video option here on YouTube!

March 2024 added 303,000 jobs still driven by healthcare and government with a pop in construction.

Business and personal bankruptcies are up as high rates continue. Layoffs continue and hit 14 month high. I suspect we’ll see layoffs as a regular theme in the coming years rather than events specific to financial performance. Companies who want to move in new directions will likely be faster to make changes as will employees who move from role to role.

Generational shifts continue at work with a few SIX generation workplaces! Good news for skilled labor, Gen Z are taking to trade schools with enrollment numbers reaching their highest peak since 2018.

February 2024 added 275,000 jobs largely in healthcare and government.

Tax credits for R&D (software engineering jobs included!) is stalled in the Senate and profitable tech companies (not just big ones!) are holding their breath.

I’m hearing more chatter about reduced schedules in addition to pushes for remote. This is in contrast to CEO’s feeling more optimistic about the economy and moving towards more aggressive growth.

Big jumps in AI job postings (42%) according to Indeed and more.

January 2024 saw 353,000 new jobs added. Growth was observed across several sectors, leading to an increase from December. Notably, while healthcare and government sectors continued to expand, the business services, retail, and social assistance sectors also experienced significant gains.

CEO sentiment is up as inflation cools and consumer spending stays high. While they may be more bullish, the emphasis on performance and slower fundraising environment is likely to remain. Financial performance was once one of the only leading indicators of layoffs but I believe those days are largely behind us. We’ll likely continue to see layoffs where executive teams see opportunities for efficiency. Those companies who find other ways to reach peak performance without overt layoffs are likely to see some goodwill towards their employer brands. See: Nintendo’s notoriety amongst widespread gaming cuts.

Excellent tech news as moves to restore Section 174 are nearly official and R&D expenses open back up to include hiring!

While Gen Z become the 2nd largest generation in the workforce (#1 spot goes to Millennials), burnout remains high across all groups.

Specific to younger workers, new estimates say that workers under 30 are losing 54 days a year (do that math! that’s a little over one day/week!) where they may be clocked in but are not effectively working due to health or mental health challenges. Attempts at wellness programs are not quite mending this gap with less than a quarter of employees taking advantage of those offerings.

I believe we’ll see this line (unfortunately!) continue to blur as to who is responsible for health and wellness between employer, society and employee themselves. Continued conversations and different definitions around “safety” at work make this more challenging with older generations being more accustomed to that conversation around physical safety and for younger workers that word encompassing identify and workplace conflict in broader ways.

December 2023 exceeded job growth expectations at 216k jobs. Growth continued to come from Government and Healthcare.

Overall we ended 2023 up 2.7M jobs. That’s not bad! But felt kinda bad in comparison with the 4.8M jobs we added in 2022. And layoffs are a bummer!

Section 174 is having real impact on tech companies and I suspect layoffs in tech will escalate across Q1 and Q2.

Will be chatting 2024 trends LIVE on 1/16 (RSVP here). Highlights include: shifting demographics (Gen Z > Boomers!), AI changing jobs (see: Google’s Ad Sales restructure) and widening skills gaps.

The US added 199k jobs in November of 2023. Those numbers were aided by several major strikes ending including UAW (+30k jobs) and SAG (+17k jobs).

Overall, this is solid traction to tick unemployment down slightly. Gains continued to come largely from healthcare and government. Soft holiday hiring contracted roles in retail/hospitality which had previously been a major source of job growth.

In 2024 there will be more Gen Z than Boomers in the workforce. Boomers continue to retire at higher than expected rates. 2M more have retired this year. Millenials will remain the largest group in the workforce until the 2040s.  Consider that the oldest of Gen Z are already 27 so this isn’t just college grads/entry level workers. 

What does that mean? Expectations around transparency, collective action and establishing firmer boundaries are likely to grow. 

Worldwide, the population over 60 will nearly double from 12% to 22% according to the World Health Organization. Reversing demographics including birth rate would take decades and labor shortages without technology changes (oh hey, see: AI) will grow.

Immediate impacts in creative spaces like writing and design though jobs aren’t necessarily disappearing yet. Instead, the wage growth is flattening and in some cases even beginning to compress. White collar professional jobs are the most likely see AI exposure in the near term. Jobs that are about “doing” rather than “deciding/setting strategy”.  Take for example, the minute that Emmett Shear was at OpenAI — the big strategic decisions are not likely to be automated but plenty of a CEOs job could readily be automated. 

It’s not ready to fully replace though as this now-fired lawyer found out! Or this person who had AI send 5000+ applications… but only got 20 interviews. 

In physics, the half-life of a radioactive substance refers to the time required for half of the substance to undergo radioactive decay. Applied to skills in the workplace, the half-life metaphorically describes the time span after which half the value or utility of a skill has been lost due to changes such as technological advancements, market dynamics, or evolving job requirements.

The half-life of a skill used to be estimated to be around 26 years. Recent studies put the half-life of skills at work to be somewhere between 2 years and 5 years.

The implications of that pace of change cannot be understated. That changes the window for talent development and planning from decades to years. Slack for instance is shutting down for a week just to focus on ramping up on new skills.

An early paper from Xiang Hui, Oren Reshef and Luofeng Zhou shows early and strong impacts on freelancer projects and rates post-ChatGPT for writing and editing.

Collective action continues to be a space to watch. According to Cornell, the number of workers on strike has increased 10-fold since 2021. While UAW strikes continue, workers from Walgreens, the New York Times and more have walked off the job.

We cautioned in October to not get excited and… no one got excited in November. Jobs numbers were revised down 100k for Sept/October and the recent jobs numbers came in at 150k just under expectations. Growth has continued to rely heavily on healthcare, government and leisure/hospitality growth which combined have been over 70% of the growth in the last 12 months.

SAG-AFTRA strike has ended largely in favor of writers including restrictions on the ability of studios to replace writers with AI.

UAW (auto workers) strike continues and Kaiser saw the largest ever healthcare worker walk off with 75000 workers leaving for 3 days.

I continue to advise companies to prepare for more employees sharing salary data (a protected activity!) and banding together for requests. That preparation should include both leveling compensation as well as skilling up in persuasive skills in groups.

After a soft August, September added twice as many jobs as expected with a total of 336,000 jobs added largely in leisure & hospitality, government and health care.

We do see employers moving forward with more confidence. Sentiment tends to become reality the same way that fear begets more layoffs. A few reasons (sorry!) not to roll out the party supplies quite yet:

September is typically a more robust hiring month after positions get pushed out of summer vacation season. Some of this is pent up demand not net new health.

The Federal funding propping up more than 70,000 day care centers expired at the end of September. Their closures could lead to more than 3.2 million children without childcare by the end of the year. When kids have to stay home, parents (disproportionally women in particular women of color) are forced to leave the workforce. That hits consumer spending in particular in hospitality which was the top job growth sector in September.

This raises the chances for more rate hikes already straining banks and lending in attempt to cool the economy back down. Despite executive optimism around return-to-office, I was recently at an event where candid bank execs were quite clear about their pessimism for commercial real estate and the strains in that sector.

Employers continue to push and employees continue to pull in terms of engagement, remote work & more.

Everyone seems to want a definitive “which is best” and the data so far can be cherrypicked in either direction. A small push towards hybrid seems to becoming the norm but remote work enthusiasts are just as passionate.

The tradeoffs don’t seem to be quite satisfying for either party - employers or employees.

Employers are increasingly concerned about Gen Z’s readiness and resilience in the workplace which only adds to their interest in return-to-office policies. For now, I see this tension only growing as more first-ever-jobs move from high school to post college.

90% of executives in a recent KPMG survey acknowledged they are likely to tie financial rewards (bonus, promotion etc.) to in person attendance. At Newance, we see literally 100x the applications for “remote” positions vs. “hybrid” which reflects both interest and widening the available options geographically.

Despite a softening job market, employees are demanding 11% higher wages YoY to make a move.

Curious on this one? See the recording of our Nov 7th chat here!

This NLRB continues to be extremely supportive of organized labor including new clarifications that further dissuade any union busting and punish companies who attempt it.

With ongoing strikes in entertainment to reality TV stars talking about unionizing, collective bargaining is meeting pop culture. And they have reason to be inspired including a historic win for UPS.

A new major strike by UAW (union auto workers) has kicked off as of September 15th with 13000 + workers walking out.

It’s not terribly surprising that AI is being “humanized” on a few fronts. We test AI as though it were a human taking a test. We’re assuming people want their robot coworkers to take a human shape that’s harder to build. For now, this may be an early attempt at understanding AI and getting ourselves more comfortable but it speaks to a growing disconnect between the perception and reality of AI at work. That gap plays out in already massive talent gaps between available AI experts and technical AI roles. There has been a 20x growth in AI/AI related job postings while only 1 in 10 employers is offering AI training according to a recent Ranstad study. Accenture has begun a journey to double their AI focused staff from 40,000 to 80,000 including training from basic courses to machine learning models.

This isn’t just about coding. A general sense of technical intuition and the ability to understand/implement AI from a strategic view are increasingly valuable and rare skills.

The BLS numbers are in and the economy added added 187,000 jobs in August. That brings the three month total average to 150,000 jobs/month. For comparison, in 2021 we added an average of 537,000 jobs per month. In 2009, monthly job losses were near 60,000 to 70,000.

Great news - unemployment ticked up! Why is that good? It moved up because unemployment is a count of people in the job market actively looking for work and more people rejoined the labor force. This increase in participation is the first in decades. With many critical jobs like air traffic control, nursing and childcare experiencing record and growing labor shortages, increases in overall supply of labor is critical.

There are a few unusual events impacting numbers this month for example Yellow Trucking out of business (36000 jobs lost) and strikes continuing in entertainment (17000 jobs lost). What were large losses in transportation may reverse in the coming months although transportation is often seen as a bellwether for consumer spending.

The Cost Index (wage growth) comes in quarterly but Q2 figures show a 4.3 to 4.5% increase over the last 12 months. That growth is also slowing.

Overall, economists are happy with these numbers as they reflect a cooling but still lightly growing job market.

Employers are turning up the heat within their teams and raising their expectations of employees. In 2022, leaders were (understandably so) all about what perks to add and how to share their values for talent attraction. Number of hires was a success metric in and of itself (a huge mistake!).

In 2023, employers are reconsidering what metrics matter. More leaders are thinking about things like “revenue/employee” and revisiting higher intensity KPIs. This is due to the leverage shifting back to employers as well as the pressure of higher rates/tougher fundraising/more conservative customer spending hitting management philosophies.

In May, we predicted more “wartime CEO” mode to come and that’s coming to life even at the intern level (see: Insight Partners leaderboard).

Some of this shift to results is warranted and overdue (work is an exchange after all!) but it remains to be seen how workers will react. Their growing disillusionment is unlikely to be cured by the ole bullpen style pressures of decades past. While Gen Z may be the most vocal on the internet, this widening gap is happening across demographics thanks to continued burnout and the societal shake up of Covid-19. This growing pressure contributes to evolving conversations about unionization and collective bargaining by workers.

That’s not to say that the idea of “experience” or creative recruitment is gone all together. Ikea’s new San Francisco coworking space and Roblox’s new interactive career center show creative talent attraction is alive and well.

As more people use ChatGPT, it’s inputs evolve and that has resulted in significant “drift” and declines in accuracy. Trust in AI overall remains low.

Active openings focused on AI strategy, compliance and implementation are hitting the market. For example, this spot at ThermoFisher.

I have a long list of other new job predictions here!

General purpose robots are emerging (think: 1 robot that can perform multiple and varied movements vs. 1 robot doing the same task repeatedly) quickly with per hour availability. This ability to add labor without high up front capital investment is sure to accelerate this trend. The robots are not perfect and require human supervision but this is a compelling space to watch. My prediction is that white collar office/clerical/professional jobs will see displacement first.

Of the 80k layoffs reported, 4k noted AI as the primary factor for eliminating a position. That’s notable but still a small overall percentage.

Not all AI replacements are going well. We’ve noted increased union activity overall. A recent non-profit attempt to replace a unionizing workforce with AI brought dangerous results. This kind of workforce replacement is still a “when not if” scenario but “when” is not right now.

90% of laid off H1B Visa holders were able to find new positions before their 60 day window to find new employment closed. The remaining 10% is still a considerable loss of skilled talent who (often US educated with advanced degrees) will take their skills and experience to other countries. This is a tough hit after 2020’s significant drop in both applications and approvals from policy changes amidst Covid-19. As predicted, competing counties have started ramping up their pursuit of these skilled workers. Canada is rolling out the red carpet for US H1B holders.

According to the WEF’s 2023 Future of Jobs Report, nearly half (44%) of individual workers need to be upskilled already. Big banks in particular are aggressively pushing AI hiring in their cost and profit centers and have listed thousands of jobs related to or focused on AI.

With the exception of mining, transportation, and utilities, most industries experienced an increase in employment. However, there has been a decrease in the number of hours worked, indicating shorter schedules for hourly workers.

Nevertheless, based on our anecdotal observations, it seems that many employers are cautiously expecting a stable and consistent business environment, contrary to the concerns seen in the first quarter.

We added 187,000 jobs in July which is very mild growth and slightly lower than expectations.

Early signs of AI enabled work are impacting hiring plans more than full on job replacement so far. Advances in GitHub Copilot can enable 1 engineer into many (my confidential sources are saying 40x with new releases coming) while IBM plans on supplementing their current workforce rather than hiring 7800 additional people. 

Decrease in tech layoffs but layoffs are continuing mildly market wide.

Layoff rate in the information sector (aka tech) is down to 16k/month in April from a previous monthly average of 49k. Layoffs overall were up 20% for a total of 80k according to a Challenger, Gray & Christmas study.

Job openings reversed declines (9.7 to 10.1M) but these increases are largely in retail, transportation and warehousing. Job openings fell in accommodation and food services, business services and manufacturing. The unemployment rate rose to 3.7% in May.

The market overall still seems to be cooling though numbers continue to surprise economists.

We are still adding jobs overall but that rate is slowing and certain professional sectors are not seeing that growth.  

Hiring increased month-over-month in 8 of 20 industries – this is an increase from the 4 industries that saw hiring gains in February - Farming/Ranching/Forestry, Utilities and Oil/Gas mining saw the largest growth. 

Unemployment remains low at 3.5% overall. This is not a full on “employers market” yet.

Expensive capital (see: rates) and ongoing economic concerns (see: banking, commercial real estate, inflation) mean more leaders are turning to “Wartime” mode whether they call it that or not. This may include pushing for return-to-work (which does force some voluntary attrition aka people quitting - and yes, they know that!) and/or other “austerity measures”. 

While this isn’t necessarily positive “leverage” for employers. It does impact their mindset and the aggressive stance they may feel is necessary in negotiations. They have ground to make up after (many would say) excessive hiring in 2022 and even into 2023. Most unicorns increased headcount over the last year.

Rises in unionization efforts even expanding to contract workforces along with a more pro-worker NLRB and FTC.  Policy changes range from additional union organizer protections, updates to non-disclosure for severance and proposals to ban non-compete agreements. As of June 2023, non-compete agreements are also being held to more pro-worker standards.

For decades, union membership has been falling but I see more collective action in our future. See: recent writer’s strike and over 155,000 civil servants in Canada on strike over remote work.

Leaders should absolutely be preparing for how to manage more organized labor whether they formally unionize or turn to group negotiations.

Labor force participation trended up a tiny bit month over month but remained below pre-pandemic levels.  Likely to stay low given demographic shifts with Boomers retiring and fewer incoming workers to take their place. From #worktok to increasing conversations around mental health, younger employees are also more likely to advocate for more work/life balance and lower overall hours worked.