The American labor market just delivered its most encouraging round of data in years. Announced job cuts in July 2026 fell to 33,429, the lowest monthly total since July 2024, according to outplacement firm Challenger, Gray & Christmas. That represents a 46% decline from the same month last year and a 27% drop from June.
Zoom out further and the picture gets even rosier. Year-to-date through July, US employers have announced 477,033 cuts, a 41% reduction from the 806,383 recorded over the same stretch in 2025.
Hiring plans tell the other side of the story
Firms announced 16,095 new hiring plans in July 2026, the highest volume for this month since 2022 and a 25% increase year-on-year.
Tech still leads in cuts, but the composition is shifting
The technology sector remains the single largest source of layoff announcements, accounting for 149,023 cuts year-to-date through July. That’s roughly 31% of the national total and a 67% increase compared to the prior year period. Transportation followed at a distant second with 41,748 cuts.
AI was cited as a factor in roughly 24% to 33% of monthly job cuts through July. It remains one of the top reasons employers give for workforce changes, though restructuring has overtaken AI as the primary stated cause.
Government sector layoffs plummeted
Federal and public-sector cuts totaled just 20,752 through July 2026, compared to a staggering 292,294 during the same period in 2025. That’s a decline of more than 90%.
For the overall labor market numbers, this normalization in government cuts is doing a lot of the heavy lifting. Strip out the public sector and the year-over-year improvement in private-sector layoffs, while still meaningful, is less dramatic than the headline figure suggests.
What the stabilization means going forward
Early data from August 2026 shows 52,881 announced cuts, a figure that, while higher than July’s low, still reflects a labor market that has settled into a calmer rhythm.