What to expect from Friday’s jobs report – and AI in the future

By Alicia Wallace, CNN

(CNN) — The August jobs report is due out on Friday morning, and economists are expecting that employers added 65,000 jobs last month and the unemployment rate inched back up to 4.2%.

US employment is likely to rebound after the surprise in July, when the economy unexpectedly lost an estimated 23,000 jobs, and the jobless rate dropped to 4.1% as people exited the labor market.

Looking through the monthly swings – and there’s been a fair share of them recently – the underlying story is expected to stay the same: It remains a “low-hire, low-fire” labor market.

The stasis and the tepid job growth may not show it, but this labor market is in the throes of a major transformation as Baby Boomers retire, net immigration slows, AI advances and exogenous shocks ripple through the economy.

In an unintentionally Dickensian fashion, a recent batch of BLS reports provided some deeper context as to how the labor market is being reshaped. These reports featured employment data of the past, the present, and the jobs market yet to come (complete with projections of AI’s future imprint on industries).

Here’s a snapshot of those findings (not in chronological order, because AI’s top of mind these days; plus, my colleague made a cool interactive graphic for you).

The job market yet to come

Every year, the BLS pulls out its crystal ball – a highly calibrated and deeply scientific and incredibly robust crystal ball – to map out how the labor market could evolve 10 years into the future.

From 2025 to 2035, the US economy is projected to add 5.9 million jobs, a 3.5% increase – or, roughly, 49,200 jobs per month, the BLS reported last week.

Alongside the latest projections, the agency released a database that categorized occupations based on their theoretical and observed exposure to AI.

The exposure categories aren’t meant to be a true forecast of employment growth or decline but instead are meant to provide insight that could be helpful in career decisions. (You can read more on the BLS’ methodology here).

You can explore the data below:

The past

Last year’s job growth was one of the weakest on record, and fresh (and more comprehensive) data shows that employment growth was likely even more listless than previously thought.

The US economy added 79,000 fewer jobs than initially estimated between April 2025 and March 2026, the BLS reported last week in a preliminary release of its annual benchmarking, where the agency squares data from monthly surveys with quarterly unemployment insurance tax filings to gain a near-complete employment count.

If these estimates hold (the final revision will be released early next year), it will shrink job growth during that period to 194,000 from 273,000, or roughly 16,000 jobs per month versus nearly 23,000 jobs per month.

So far this year, job growth is running at a monthly average of just under 61,000 jobs per month. That’s about half of what the economy previously averaged in 2024 or in the 80 years before the pandemic.

Hiring has been stifled in part by high uncertainty, high interest rates, high inflation and volatile policy shifts and geopolitical developments.

“These drivers that are underlying employers’ hesitance to hire – both inflation as well as uncertainty – they are going to take a long time to ease,” Noah Yosif, chief economist at the American Staffing Association, told CNN. “What employers are really looking for is their cost of business to come down and then to have more certainty.”

But the economy also doesn’t need to add as many jobs as it once did.

“We’re continuing to see lower labor supply due to things like lower immigration, lower birth rates, increased retirement – and so that’s going to keep the labor market broadly in balance,” he said.

The present

July’s estimated job losses were surprising, but they shouldn’t be cause for alarm, several economists noted in their commentary this week.

The decline was “almost certainly a quirk of seasonal adjustments,” wrote Dean Baker, senior economist at the Center for Economic and Policy Research. He noted an estimated 49,600 downswing in local government education jobs that likely was the result of school districts adjusting the timing of summer breaks.

Employment is expected to rebound at local schools as well as in the leisure and hospitality sector; however, those gains could be offset by losses tied to the Trump administration’s termination of Temporary Protected Status for Haitian workers, wrote EY-Parthenon economists Gregory Daco and Lydia Boussour.

“Beneath the volatility, job growth remains soft but stable,” they noted.

The labor market seemingly is on solid footing, unemployment is low, job cut announcements are running 40% below this time last year, and wage growth isn’t considered to be a source of inflation. However, it’s a labor market that’s doing just fine for the economy but doesn’t feel great for many workers or job seekers, Yosif said.

“For the better part of three years, 94% of jobs have been created within just three sectors: healthcare, leisure and hospitality, and (state and local) government,” Yosif said. “So, while folks like (Federal Reserve Chairman) Kevin Warsh say that the labor market is broadly in balance, that really doesn’t connect with the options available to many job seekers today.”

The BLS’ latest labor turnover data, released Tuesday, showed that hiring activity remained muted despite an uptick in job postings, an indication that employers remain cautious.

And, separate data released Thursday shows that the “low-fire” descriptor is holding firm.

More US businesses announced job cuts last month than they did in July. But at 52,881, that’s the lowest August total since 2022, new data from Challenger, Gray & Christmas showed. Jobless claims continue to remain at low levels: They were at 206,000 last week, Labor Department data shows.

Healthcare is expected to continue to drive August’s job gains. That was indeed the case in ADP’s latest monthly private-sector employment report released Wednesday.

The payroll giant noted that education and health services added 45,000 jobs last month, offsetting losses in other sectors to leave a net gain of 38,000 jobs. ADP on Wednesday also launched an interactive pay database and started reporting base pay data (which excludes bonuses, commissions, tips and other earnings).

Overall base pay slowed to 3.2%, it held at 3% for job-stayers and cooled to 4.7% for job-changers.

“There is a cost to a low-hire, low-fire labor market, because one of the ways that workers outrun too-high inflation is by switching jobs,” said Nela Richardson, ADP’s chief economist. “If the premium for the opportunity to job-switch isn’t present, it’s going to be harder for workers overall to keep up with higher inflation.”

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