Labor Market Expected To Hold Steady With Payrolls Adding 80,000 Jobs in July

The U.S. labor market will face another crucial test Friday when the Labor Department releases its July employment report, with economists expecting modest hiring gains and a steady unemployment rate despite mixed economic signals throughout the past week.

According to a Bloomberg survey seen by Yahoo Finance, economists expect nonfarm payrolls to increase by 80,000 jobs in July while the unemployment rate is forecast to remain unchanged at 4.2%.

If the projections are met, hiring would improve from June, when employers added just 57,000 jobs, but would still point to a labor market that continues to cool from the rapid pace seen in previous years.

Recent economic data has painted a mixed picture. Some indicators suggest hiring has softened, while others point to a labor market that remains fundamentally stable rather than deteriorating.

Job openings eased slightly in June, according to government data released earlier this week, while measures of hiring, quits and layoffs showed little meaningful movement. The relatively steady figures indicated that employers are becoming more cautious but are not engaging in widespread job cuts.

Private-sector payroll processor ADP also reported weaker-than-expected hiring growth for July, adding to concerns that employers remain reluctant to expand their workforces. However, the report contained one encouraging sign for workers.

Employees who changed jobs continued to receive stronger wage gains than those who stayed with their current employers, suggesting competition for skilled workers has not completely disappeared.

Additional evidence of labor market stability came from global outplacement firm Challenger, Gray & Christmas, which reported that announced layoff plans declined during July while corporate hiring plans increased compared with the previous month.

Another closely watched report offered an even more optimistic assessment. An analysis released Wednesday by the Bank of America Institute suggested payroll growth may have accelerated during July based on customer deposit account data.

The research indicated employment gains were strongest among lower-income households, a shift that also translated into faster wage growth for those workers. According to the analysis, annual after-tax wage growth for lower-income households exceeded that of higher-income households for the first time since December 2024.

Bank of America researchers attributed the improvement largely to increased job mobility among lower-income workers. "What's driving the pick-up in after-tax wage growth among lower-income households? Alongside strong job growth, we have also observed a rise in job-to-job movements disproportionately boosting lower-income pay growth," the report said.

The institute also suggested other factors may be supporting stronger take-home pay, including tax withholding changes stemming from the One Big Beautiful Bill as well as continued cost-of-living pressures that have prompted workers to seek higher-paying opportunities.

Researchers also observed that more Americans were supplementing their primary income with gig work. By June, there had been a broad-based increase in the share of customers who already held traditional jobs while also earning income through freelance or app-based work, reflecting how many households continue looking for additional sources of income.