The prevailing read on US industry employment shifts is that the labour market is holding up reasonably well. The sector-by-sector data released by the Bureau of Labor Statistics complicates that reassurance considerably, because the aggregates are concealing some deep structural fractures running beneath the surface.
Wolf Richter, writing for Wolf Street, pulled the August employer-survey data apart by industry, and the picture that emerges is less a healthy labour market than two economies occupying the same statistical skin. Construction and healthcare are adding bodies. Information technology is shedding them at a pace not seen in over a decade.
Where the Jobs Are Going, and Where They Are Not
Start with the category doing the most structural damage. The information sector, which covers software publishing, data processing, broadcasting, and telecommunications, shed 115,000 jobs over the past twelve months and lost 23,000 in August alone. Employment in the sector has fallen to its lowest level since 2015. The over-hiring that occurred during the pandemic has been unwound, and AI has taken over a substantial portion of skilled human labour in software publishing and video production.
The long-range projections make this tension harder to dismiss. The BLS projects that demand for AI-based systems, data processing, and associated consulting will drive information-sector employment up by 6.5% by 2034. The current contraction and the ten-year projection are not necessarily contradictory, the transition period is the brutal part, and the data suggests the industry is still in it.
Government employment tells a different kind of story. The federal government has shed 336,000 jobs, or 11.2% of its payrolls, since January 2025. Civilian federal employment has fallen to a record-low share of 1.7% of total employment, the lowest in data going back to 1939. State governments have cut 55,000 positions, largely in higher education. Local governments have moved in the opposite direction, adding 157,000 jobs over the same period. Combined, all government payrolls now account for 14.7% of total nonfarm payrolls in August 2026, against 15.4% a decade earlier and 16.1% two decades ago. The trend is long and consistent, but the federal acceleration since January 2025 is of a different character.
Professional and business services added 152,000 jobs over twelve months and gained 10,000 in August. The category had its low point in October 2024, after the pandemic over-hiring was absorbed. Government contractors that lost federal work in 2025 sit within this category, which means the net gain understates the underlying churn.
AI Infrastructure Pulling Hard Against Its Own Disruption
Construction added 120,000 jobs over twelve months and 22,000 in August. The residential side has weakened under declining single-family demand and pandemic-era oversupply of multi-family units. What is keeping the sector buoyant is infrastructure: data centres, factories, and power plants. The skilled-labour shortage in this segment is already acute, and the scale of the problem is not reflected in the headline numbers. iRecruit projects a shortfall of up to 499,000 workers in data-centre construction alone in 2026. Construction payrolls are growing, but the constraint on growth is supply of labour, not demand for it.
Utilities make a related point. Small in headcount but large in economic consequence, the sector has added 13% to its workforce since the summer of 2020, taking employment from 541,000 to 612,000 currently. That hiring boom followed years of declining employment and has been driven by AI infrastructure’s demand for electrical capacity. The BLS projects that increased demand for electricity, tied primarily to AI integration, electric vehicles, and new data centres, will continue over the next decade.
Healthcare and social assistance remains the volume leader, adding 546,000 jobs over the past year and 28,000 in August alone, with total employment at 23.9 million. Leisure and hospitality bounced back 62,000 in August after two months of steep declines. Financial activities shed 99,000 jobs over twelve months, with real estate brokering and mortgage lending under sustained pressure from a four-year downturn in home sales. Transportation and warehousing lost 51,500 jobs over twelve months despite small monthly gains. Retail trade has added jobs so far this year but the long-term decline, which began in 2017, has not reversed.
The BLS projects total employment growth of 5.2 million between 2024 and 2034. If the sector-level data is any guide, most of that growth will accrue to healthcare, infrastructure-adjacent construction, and AI-adjacent professional services, while information and government continue to lose ground. The consensus on labour-market health may be directionally correct in aggregate. Sector by sector, the divergence is widening, and that gap is where the structural story lives.
