Labor and Industry Trends

Technology sector grows, unemployment rate steady

The U.S. labor market showed signs of slowing in July as total nonfarm payroll employment declined by 23,000 jobs. This marks a reversal from the average monthly gain of 34,000 jobs over the previous 12 months. It’s worth noting that technology, at +11,000 jobs in July, is one of the few sectors that showed net growth. The unemployment rate remained relatively stable at 4.1%, suggesting employers continue to hold onto workers even as hiring activity moderates. The July Bureau of Labor Statistics data showed corporate use of temp talent returning to year-over-year growth in July, continuing a positive inflection that began seven months ago. This is the first time since October 2022 that the number has been positive YOY.

Clients turn to flexible staff as employment declines

The decline in employment suggests employers are becoming cautious about adding staff and are increasingly turning to flexible options to meet their needs. Technology employers in particular, who are largely project driven, are demonstrably turning to flexible resources to meet their needs. A number of third-party surveys of job postings continue to show an increase in the number of technology jobs posted where the clients are seeking a flexible resource. There continues to be a lot of discussion around AI and the labor market. As Joe Liberatore, Kforce CEO said on our recent earnings call: "We view AI as one of the most significant technology shifts of the last several decades; however, we believe enterprise adoption remains in the early stages and is likely to follow a progression similar to prior transformative technology cycles. “While much of the current focus remains on the underlying technology, our experience suggests the greatest value creation will come from effectively integrating AI into business processes and operating models. Successful adoption will require organizations to align strategy, talent, data, governance, and change management capabilities in order to translate AI potential into measurable business outcomes. Through our technology talent solutions and consulting capabilities, we believe Kforce is well positioned to help clients navigate this transformation, accelerate modernization efforts, and realize the value of their technology investments creating a competitive advantage." We encourage clients to partner with Kforce experts for talent strategy and support on critical projects. For more than 60 years, Kforce has helped organizations navigate changing labor markets and workforce challenges. As technology and economic conditions continue to shift, access to specialized talent and strategic workforce solutions remains essential for achieving business objectives.

by Michael Blackman

Published August 13, 2026

AUGUST 2026

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Michael Blackman

Learn more about Kforce

As Chief Corporate Development Officer at Kforce, Michael Blackman, a 32-year Kforce veteran, is the primary focal point for the firm with the Wall Street and financial communities. He is regularly sought out by leading economists for his perspectives on the economy and labor markets, and he contributes to a number of key proprietary economic publications.

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U.S. flex workers, year-over-year change

3.1

2.7

2.3

1.9

1.5

1/00

Source: BLS

2.9

2.5

2.1

1.7

US Flex Workers (in millions), Left Axis

US Nonfarm Payroll Workers (in millions), Right Axis

Temporary help penetration as a % of private non-farm payrolls

1.85%

1.84%

1.83%

1.82%

1.83%

1.81%

1.83%

1.84%

1.85%

Jul 2026

Jul 2025

Aug 2025

Sep 2025

Oct 2025

May 2026

Jun 2026

Nov 2025

Dec 2025

Jan 2026

Feb 2026

Mar 2026

Apr 2026

Source: BLS

July Bureau of Labor Statistics data

3.3

3.5

120

125

130

135

140

145

150

155

160

1/01

1/02

1/03

1/04

1/05

1/06

1/07

1/08

1/09

1/10

1/11

1/12

1/13

1/14

1/15

1/16

1/17

1/18

1/19

1/20

1/21

1/22

1/23

1/24

1/25

1/26

1.79%

1.80%

1.81%

1.82%

1.83%

1.84%

1.85%

1.86%