Tech sector adds jobs, defies overall US job market decline

While the number of US jobs declined by 23,000 in July, employment in the tech sector rebounded as the AI revolution continues to gain steam. The national unemployment numbers were reported Friday by the US Bureau of Labor Statistics. At the same time, research firms said July was a good month for IT hiring compared to June. According to CompTIA, which analyzed the BLS data, tech sector jobs rose in July by 3,700. In June, the IT sector had lost 900 jobs. Companies last month hired in the cloud, hosting, information processing, data, and semiconductor manufacturing sectors, CompTIA said in a statement.  “We’re entering a labor market where opportunity is increasingly concentrated around specific skills, industries, and investments,” said Ger Doyle, regional president of North America at ManpowerGroup, a labor consulting firm. For example, data center hiring was up 39% in July compared to the same period last year, Doyle said. Not surprisingly, the data-center growth has been fueled by AI infrastructure needs and demand for hardware. That has helped increase the number of jobs in ancillary sectors such as transportation. July hiring data showed heavy truck driver demand, which surged by 181% from June, Doyle said. According to the BLS data, employment went up by 2.4% in the “computing infrastructure providers, data processing, web hosting, and related services” sectors, which is listed under the information sector. Jobs in the “computer and electronic product manufacturing” sector — which is bunched under manufacturing — rose by 2.9% from June to July. But bad news continued for the telecommunications sector, where the number of jobs declined by 1.5% from June to July. That continued a downward slide in recent years. Overall job layoffs slowed in July, with 33,429 cuts announced; that’s down from 45,849 cuts announced in June, and the lowest since July 2024, according to data from Challenger, Gray and Christmas. “Hiring has also increased over last year by 25%, so while AI is shifting the labor market, it is not dismantling it,” said Andy Challenger, chief revenue officer for Challenger, Gray & Christmas. The tech sector announced 9,867 cuts in July, bringing the year-to-date total to 149,023 so far in 2026, according to Challenger figures. Tech sector hiring and job losses vary as organizations use different measurement techniques to gauge the overall hiring environment.  The top-line US unemployment rate declined to 4.1% from 4.2%, in part because of  workers leaving the workforce or not looking for jobs, indicating a slow labor market. Still, hiring demand exists across the US, despite declining labor force participation and longer job searches, Doyle said. Because technology underpins many of the changes occurring across sectors such as healthcare and services, employers are rethinking hiring.  “That’s why the labor market many workers are experiencing doesn’t always match the one described by the headline numbers,” Doyle said. ADP’s National Employment report said only 44,000 jobs were added to private payrolls in July, with choppiness across sectors. But demand for AI skills continues to rise, according to research firms that track growth by analyzing job listings. CompTIA noted that about 14,000 new job listings in July sought AI and machine learning skills. It’s not clear how the ongoing AI boom may be hurting or helping human jobs. Many recent job cuts have been attributed to AI, though some companies have been accused of using the technology as a rationale for cuts they made for other reasons. A recent OECD report said that even manual jobs once thought immune to AI are at risk of being taken over by robots. The OECD report said creative jobs — typically management, arts, and social work — will be least threatened by AI. There are also increasing indications that successful AI deployments will require humans in the loop. For example, more consulting firms are using forward-deployed engineers (FDEs) to implement agentic AI. And smaller consultancy firms are finding more productivity by automating mundane work with AI and spending more time meeting client requirements.