A record wave of Americans is leaving the labor force, dragging participation to its lowest level in five decades outside pandemic lows, and economists do not agree on why.
About 1 million workers left the labor force over the past year, including 720,000 in June alone, according to the Labor Department.
The labor force participation rate fell to 61.5% in June, the lowest reading since March 2021.
The unemployment rate ticked down from 4.3% to 4.2% in June, but Glassdoor chief economist Daniel Zhao said the drop reflects fewer people looking for work rather than more hiring.
Participation among workers 55 and older fell to 37.1% in June, a 21-year low.
Economists point to a mix of retirements, caregiving pressures, return to office mandates and discouragement among the long-term unemployed as possible drivers.
This points to a labor market that's stubbornly refusing to reaccelerate, despite recent optimism."
Read more via USA TODAY
Construction employment increased in 33 states and D.C. over the past year, with Texas and Louisiana leading gains, according to the Associated General Contractors of America.
Texas added the most construction jobs over the year, 24,800, followed by North Carolina, Ohio, Illinois and Louisiana.
Louisiana posted the largest 12-month percentage gain, at 7.7%.
California lost the most construction jobs over the year, down 15,400, followed by Virginia, New York, Georgia and Michigan.
Association officials warned that tariff uncertainty, stalled highway funding and resistance to data center development could undermine future construction demand.
Construction firms continue to add workers where demand remains strongest."
Read more via Associated General Contractors of America
A St. Louis Fed survey of Eighth District businesses finds AI adoption still in its early stages, with most firms expecting no near-term staffing changes even as the technology reshapes required skills.
Nearly half of firms, 49%, expect no noticeable staffing effect from AI within the next 12 months.
About 18% expect shifts in the skills their workforce needs rather than headcount changes.
Roughly 20% expect slight staffing reductions, including a restaurant operator that said AI order taking eliminated a drive thru position.
The most cited reason for limited AI adoption was a lack of skills, data or technical infrastructure, cited by 38% of firms.
A law firm estimated AI tools save attorneys two to three hours a week on research, deposition summaries and first drafts.
Read more via Federal Reserve Bank of St. Louis
Workforce decisions like layoffs are now the second most likely trigger for class action litigation, trailing only data breaches, according to a midyear survey of corporate counsel from Norton Rose Fulbright.
47% of in-house counsel named workforce changes such as layoffs and policy revisions as a likely class action trigger in 2026.
State-level employment and labor dispute exposure grew faster than federal exposure, at 44% versus 39%.
43% of respondents expect AI-related bias or discrimination claims to increase their litigation exposure through the end of 2026.
Among companies with more than $1 billion in revenue, the share citing AI- driven employment decisions as a litigation risk rose to 41%.
Energy companies reported the highest employment and labor exposure of any sector, citing hourly and contractor heavy workforces.
AI assisted hiring tools are creating real uncertainty for employers, particularly around bias and discrimination claims. The risk isn't theoretical. It's already being tested in courts and before the EEOC."
Read more via HR Executive
The Trump administration imposed tariffs of about 10% on goods from more than 80 countries Friday, its latest attempt to rebuild a tariff system that has been repeatedly struck down in court.
The new duties range from 10% to 12.5% and took effect at 12:01 a.m. Friday, replacing a global 10% tariff that expired at the same moment.
The tariffs apply to 60 trade partners covering 99.4% of US trade, according to the Office of the US Trade Representative.
The administration is using Section 301 of the Trade Act of 1974, citing countries' failure to enforce bans on goods made with forced labor.
Canada and the European Union each face a 10% rate under the new tariffs, though both already have or plan forced labor import bans, a point critics say undercuts the administration's stated rationale.
The specific authorities this administration is using have changed, but the trade strategy has not. We are committed to continuing to use tariffs and to negotiate deals to support the re-industrialization of our economy, protect American workers, and increase their wages and shrink our trade deficit."
The tariffs do not stack on top of existing Section 232 steel and aluminum tariffs, and exclude oil and gas, certain natural resources, and goods covered under the USMCA.
A separate Section 301 investigation into excess manufacturing capacity by 16 countries remains open and could produce further tariffs.
Read more via The New York Times, CNBC, AP, NPR
Immigrant employment across the EU reached a record high in 2025, narrowing the gap with native born workers, even as new data show nearly one in five EU jobs fall short on pay, security or workplace rights, and businesses see wage growth cooling despite an inflation pickup.
The EU immigrant employment rate rose to 68.2% in 2025 from 67.8% in 2024, according to RFBerlin's Centre for Research and Analysis of Migration.
Non-EU immigrant employment climbed 6.6 percentage points since 2017, from 59.4% to 66%, though it still trails the native-born rate.
Separately, the European Foundation for the Improvement of Living and Working Conditions (Eurofound) found 18.8% of EU jobs fell short on income, security or workplace rights in 2021, with Spain highest at 29%, followed by Portugal and Luxembourg at 25% and Italy at 24%.
Eurozone businesses surveyed by the European Central Bank expect wage growth to slow to 2.5% this year and 2.4% next, down from 3.1% in 2025.
Only 20% of businesses surveyed by the ECB expect workers to press for bigger pay raises in response to rising inflation.
Read more via Reuters, Euronews, The Wall Street Journal
Germany: Consumer confidence weakened further, with the Nuremberg Institute for Market Decisions' climate index falling to minus 29.6 in its August forecast from minus 29.3 in July, driven by lower income expectations and greater willingness to save. The decline came despite the European Central Bank holding rates steady this week, citing continued uncertainty from the Middle East conflict's effect on energy prices. (The Wall Street Journal)
Japan: Manufacturing output rose at its fastest pace since February 2014, with the flash Composite PMI climbing to 53.1 from 52.8, while private sector employment increased for a 34th consecutive month. Firms remained optimistic about the year ahead, though confidence weakened from June amid uncertainty over the Middle East conflict's impact on energy prices and supply chains. (U.S. News & World Report)
United Kingdom: British business activity rose for the first time in three months in July, with the S&P Global Composite PMI climbing to 52.1 from 49.3, though the survey's employment measure extended a decline that has continued since a 2024 budget raised employer social security contributions. New Prime Minister Andy Burnham has since cut business rates for hospitality firms and removed tax on domestic electricity bills. (Reuters)
