Not only did payrolls grow by just 73,000 in July, below Wall Street estimates, but the revisions also showed that the spring had two consecutive months of growth below 20,000. The unemployment rate edged up to 4.2% from 4.1%, as the labor force shrank. Added to this sluggish cocktail is new data showing a remarkable surge in layoffs in July as well.
The report says these cuts are “well above average for this month since the pandemic,” and one of the highest July pullbacks in the past decade, evidence that deep, technology-driven changes are rippling through the labor market. For perspective, the average number of job cuts announced in July from 2021 to 2024 was just 23,584. Even against the broader decade’s average of 60,398, this year’s total is notably higher.
While AI’s influence dominates headlines, federal budget cuts—known as the “DOGE Impact”—are another pillar driving this year’s wave of layoffs. The government sector has announced 292,294 job cuts this year, most at the federal level, as courts greenlight sweeping reductions. These have affected not just direct government roles, but also non-profits and healthcare through downstream funding losses, totaling an additional 13,056 layoffs.
Other economic stressors remain ever-present: Market and economic conditions have accounted for 171,083 cuts year-to-date, inflation and weaker demand have shuttered stores and plants (120,226 layoffs), while restructurings and bankruptcies contributed 66,879 and 35,641 cuts, respectively.
Job cuts are distributed unevenly across the U.S. The East Coast has seen the most dramatic year-over-year increase, rising 219%, spurred by federal agency reductions in Washington, D.C., as well as steep jumps in states like New Jersey (+362%) and New York (+43%). Out West, California has also been roiled by 114,676 layoffs (+50%). In the South, job cuts climbed 34% overall, with Georgia and Florida seeing spikes of over 70%.
