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UKG Report: Slowing Job Growth in July Likely Indicates Continuation of “Soft Landing”

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Job growth for the month of July may show a slight slowdown compared to June, according to early indicators from UKG data, but this isn’t bad news: In fact, it’s a sign of the continued “soft landing” that the Federal Reserve is hoping to orchestrate as it aims to bring the labor market, and the economy-at-large, back into balance.

We’ll share our analysis, which will be released on Tuesday, August 2 at 10 a.m. ET, during a live market briefing. Here’s a first look at our takeaways:

  • Slight decline in workforce activity: July experienced a -0.6% decline in the total volume of shifts being worked at U.S. businesses. This is a reversal from the growth experienced in June, and more consistent with the activity levels we saw during the spring months.
  • UKG Recovery Index hits 2022 low: The UKG Recovery Index—a measurement used to anticipate changes in labor participation—now sits at 95.5, the lowest of the year. July workforce activity measured 4.5% lower than July 2021, which was a period of robust growth. This makes it more likely we will have muted, though still slightly positive, new job creation gains in July.
  • No widespread layoffs expected, but...: Outside the technology and finance sectors, UKG is not seeing signs of widespread layoffs. However, sectors including retail and hospitality, and services and distribution, both saw workforce activity decline slightly after positive growth in June. Some of this can be attributed to summer vacations, but a much more likely impact is businesses—still facing a tight labor market—are deciding not to replace roles as people leave.

For a deep dive into UKG employment expectations for July and our outlook for the coming months, register to attend the UKG Live Market Briefing on Tuesday, August 2 at 10 a.m. ET.

Each month, UKG releases its Workforce Activity Report. This upcoming report will be the 46th published by UKG on the state of the economy since April 2020. At the onset of the pandemic, UKG began publishing this high-frequency index, which analyzes the actual number of shifts being worked by 4 million people on a week-by-week basis, to provide a near real-time view of employment trends. The goal is to provide policymakers, business leaders, and economists with the most current information possible to guide decisions that affect hundreds of millions of people.