US Professional and Technical Services Sector NAICS 54

Jul 15, 2026 - Low Hiring Rates Keep Long-Term Unemployment Near Five-Year High

• Despite a seemingly strong US labor market, nearly 2 million Americans have remained unemployed for six months or longer, highlighting a growing divide between improving headline job numbers and the experience of many job seekers. The Labor Department reported that 27.3% of unemployed workers had been out of work for at least 27 weeks in June, near the highest share since late 2021 and up four percentage points from a year earlier. Economists say employers remain in a "low-hire, low-fire" mode, with hiring rates largely unchanged for the past two years despite steady job growth and a 4.2% unemployment rate. White-collar fields, including professional services, finance, information technology, and government, have been hit especially hard, leaving many experienced workers struggling to find new roles. Extended unemployment can erode skills, drain savings, reduce lifetime earnings, and increase pressure on workers to accept lower-paying jobs or change careers altogether.
• Remote work is emerging as another headwind for recent college graduates, with new research suggesting it may be reducing entry-level hiring even as concerns about AI dominate the conversation. A London School of Economics study of more than 400 million online job postings found entry-level hiring has fallen more than 14% since 2019, with companies that remained remote after the pandemic cutting junior recruiting the most. Researchers argue that remote work slows learning, mentoring, and skill development, making inexperienced workers a less attractive investment than seasoned employees. Many young professionals also report weaker networking opportunities, fewer chances to develop workplace social skills, and a greater sense of isolation, while some worry remote relationships make layoffs easier. At the same time, surveys from Gallup and Deloitte indicate Gen Z continues to value workplace flexibility, highlighting the tradeoff employers and young workers face between career development and remote-work benefits.

• US employers announced more than 97,000 job cuts in May, with the technology sector leading reductions for the month, according to a report from Challenger, Gray & Christmas. Tech companies accounted for 38,240 layoffs and have announced 123,655 job cuts so far in 2026, a 66% increase from the same period last year. AI was the top reason cited for layoffs for the third consecutive month, with AI-related restructuring now linked to 22% of all announced job cuts. Challenger said companies are acting on AI’s potential to automate work and boost productivity, particularly in the technology industry. Despite rising tech layoffs, overall US job cuts remain well below last year’s levels, down 43% through May after federal workforce reductions drove unusually high totals in 2025. Employers have also announced 80,470 planned hires this year, though hiring remains historically weak compared with pre-pandemic levels.
• US companies are increasingly embracing large-scale layoffs, with firms like Snap, Block, and Amazon recently cutting anywhere from 16% to 40% of their workforces in single sweeping moves. Rather than being seen as a sign of trouble, these mass cuts are now rewarded by investors with stock bumps and praise. Block's CFO noted that executives from other companies have been reaching out to replicate their playbook. The driving forces are a mix of pandemic-era overhiring corrections, the soaring costs of building AI, and a broader shift in how leadership views large teams - increasingly as a drag on performance rather than an asset. While AI is often cited as justification for job cuts, most executives acknowledge it isn't directly replacing workers yet. The human toll is real: white-collar unemployment is rising, with college-educated workers under 35 now facing higher joblessness than those with only two-year degrees.