If you’ve been following our 2026 labor market outlook coverage this year — from the asterisk behind the strong May jobs report to our 2026 Mid-Year Salary Trends — you’ll know that, in general, the broad shape has been consistent. Hiring appeared slow, but far from collapsing. Pay was holding relatively steady. The “low-hire, low-fire” market that’s defined the last two years was still the market.
Then the July jobs report landed.
Payrolls went negative for the first time at -23,000 jobs. May and June were revised down by a combined 103,000. What had looked like modest growth now barely registers. Unemployment ticked down to 4.1%, but the labor force participation rate also dropped (down 0.7 percentage points since January), which means fewer people are looking. And wage growth slowed to 3.2% annually.
The cooling we’ve all felt is now firmly in the 2026 data. We’re further from an all out recession, but also further from a rebound. And what’s behind this state of the market looks very different depending on where you sit.
What Economists Are Saying
Indeed Hiring Lab just released its first-ever Labor Market Outlook Survey, polling 120 economists across academia, financial institutions, and independent research. The consensus: postings will drift down about 1.4% through mid-2027, and unemployment will edge toward 4.4% by year-end.
On AI, 52% expect at least a mild drag on employment over the next year. A larger share — 57% — expect downward pressure on wages for college-educated workers specifically. The phrase that keeps coming up is “reshuffling, not hollowing out.” AI is changing which skills get paid and which roles get posted, but it is not eliminating jobs in bulk.
How It’s Playing Out By Function
The national numbers tell one story. The function-level data tells three different ones:
- Marketing: +1.5% year over year
- HR: +11.8% year over year
- Banking & Finance: +9.4% year over year
- Accounting: -20% year over year
And it’s not just volume that’s splitting. Revelio Labs‘ latest data shows advertised pay for the highest-paid roles rose 6.4% in real terms over the past year, while the lowest-paid roles fell 2.2%. Professional services is driving most of that top-end growth. Companies are paying up for senior, specialized talent — and pulling back everywhere else.
Marketing
Of the four functions in Indeed’s posting data, marketing is the quietest — posting growth of just 1.5% year-over-year while HR and finance are running 6–10x hotter. Professional and business services payrolls were essentially flat in the July BLS data.
That doesn’t mean marketing hiring has stopped. But demand isn’t building the way it is in other functions right now. For marketing professionals, the signal reads in both directions — if you’re hiring, you’re competing with fewer other companies for talent. If you’re looking, patience and specificity matter more than they did a year ago.
HR
HR posting volume is up nearly 12% in the most surprising number in this dataset — especially given how flat HR comp has been. Payscale’s Q2 data showed HR wages growing at 3.6%, below inflation. Companies are posting more HR roles. They’re just not paying more for them yet.
That gap between demand and comp is something to watch closely. When posting volume runs this far ahead of pay, one of two things tends to happen: wages catch up, or companies start losing the people they can’t afford to replace. In a market where teams are already lean and 59% of professionals report burnout from understaffing, the second outcome carries real cost.
Finance
The headline number looks rough — financial activities lost another 14,000 jobs in July, bringing total sector losses to 121,000 since May 2025. But the breakdown tells a more nuanced story. The losses are concentrated in credit intermediation (-9,000) and insurance carriers (-7,000). More likely a restructuring story in banking and insurance instead of a broad contraction across corporate finance.
Looking at open jobs, accounting postings are down 20% year-over-year while finance wages came in flat at 3.6%. That looks like companies consolidating transactional accounting work — through automation, offshoring, or both — while keeping FP&A and strategic finance roles in place.
Does It Still Pay to Switch Jobs?
Short answer: yes. Longer answer: it depends on more than it used to.
In July, pay growth for job-changers hit 7.0% year-over-year — the fastest pace since August 2025. Stayers saw 4.4%.
But the cost of earning that premium has gone up. Searches take longer. More than a quarter of unemployed workers have been out for six months or more. Labor force participation is trending down as some people appear to have stopped looking. And the payoff varies sharply by industry: white-collar and goods-producing workers saw the strongest gains when they switched, while leisure and hospitality workers took pay cuts.
There’s a satisfaction dimension too. ADP’s research shows worker sentiment tends to be weakest during the first year or two at a new job, peaks around seven to eight years, then softens again. The grass isn’t always greener — and in a market where the search itself costs more time and energy, that’s worth weighing.
What This Looks Like Locally
Minneapolis-St. Paul wage growth came in at 3.7% last quarter — a hair above inflation, flat in real terms. Mid-sized companies (1,000–5,000 employees) posted the weakest wage growth of any org-size bracket at 3.6%, squeezed between smaller companies that move faster and large enterprises that can outspend them.
In our own data, the shift is striking. Median contract rates across our clients jumped from $37/hr in 2025 to $44.48/hr in 2026 — a 20% increase — driven largely by a tilt toward senior and experienced roles. Those same senior and lead-level roles now make up 17% of our work, up from 11% a year ago, while mid-level roles dropped from 23% to 16% over the same period.
Companies are paying more for experienced talent on a contract basis rather than committing to permanent headcount, a trend that runs consistent with everything the national data is saying.
Where This Leaves Us
Payrolls went negative for the first time this cycle. While not great news, unemployment remains low, layoffs haven’t spiked, and openings are still well above pre-pandemic levels. But the cooling continues, and job market realities continue to diverge by function and seniority.
For the full breakdown of what compensation looks like right now across Marketing, HR, Finance, Operations, and Digital — including Minnesota vs. national benchmarks for 28 roles — our 2026 Mid-Year Salary Trends report has the data.
Download the 2026 Mid-Year Salary Trends Report →
Want data specific to your roles? Custom salary benchmarking starts at $500 for up to 10 roles. Reach out to jamie.duong@celarity.com or visit celarity.com/custom-salary-report.