The U.S. labor market showed renewed resilience in July, but the latest data point to a hiring environment that remains unusually restrained. The Conference Board’s Employment Trends Index (ETI) rose to 107.71 in July from an upwardly revised 106.74 in June, suggesting employment should continue to expand, although only modestly in the months ahead.

The U.S. labor market is showing signs of stability rather than acceleration.

The Conference Board’s Employment Trends Index, a composite indicator designed to anticipate changes in payroll employment, increased in July after declining in May and June. The move offers some reassurance to employers and workers, but the broader picture remains one of limited labor-market churn.

The ETI rose to 107.71 in July from 106.74 in June, according to The Conference Board. Because the index is designed as a leading indicator, an increase generally signals that employment is likely to grow, while sustained declines can precede a slowdown in payroll gains.

Conrad Qi, an Economic Data Scientist Associate at The Conference Board, described the current environment as a “low-hire, low-fire” labor market. The ETI was only 0.6% above its level a year earlier, he noted, suggesting payroll growth could remain modest.

That distinction matters for HR leaders.

A low-hire, low-fire market does not necessarily mean employers are aggressively cutting jobs. Instead, companies can become cautious about adding headcount while also retaining much of their existing workforce. For recruiting teams, that can mean fewer open positions, longer decision cycles and greater competition for the most valuable candidates.

The July increase was driven by several indicators pointing to continued labor demand.

The share of small businesses reporting that positions were currently difficult to fill rose four percentage points, reaching 36%, its highest level since June 2025. Initial unemployment-insurance claims also declined to their lowest level since September 2022, suggesting layoffs remain relatively limited.

Those two signals tell different but complementary stories: employers still have jobs they want to fill, while workers are not experiencing a broad increase in layoffs.

Job openings were another positive contributor. The Conference Board estimated that openings increased by 168,000 to 7.53 million. Real manufacturing and trade sales also rose an estimated 0.2%, while employment in temporary help services increased by 3,400.

The latest data follow a much weaker June payroll report from the U.S. Bureau of Labor Statistics, which showed nonfarm payroll employment increasing by only 57,000 and the unemployment rate remaining at 4.2%. Health care, social assistance and professional and business services continued to add employment, while leisure and hospitality declined.

The BLS released its July Employment Situation on August 7, meaning the Conference Board’s July ETI provides an additional leading-indicator perspective on the same labor market.

There are also several temporary factors complicating the employment picture.

The Conference Board noted that seasonal education-worker reductions and the normalization of leisure and hospitality hiring following the FIFA World Cup affected payroll employment. Those factors make it more difficult to interpret monthly changes as a clean measure of underlying hiring demand.

Still, the direction of the ETI’s individual components provides useful clues.

Six of its eight components contributed positively in July: firms reporting positions they cannot fill, initial unemployment claims, job openings, real manufacturing and trade sales, consumer perceptions of job availability and temporary-help employment.

Two components moved in the opposite direction. The ratio of involuntary part-time workers increased to 17.4% from 17.1%, while industrial production also contributed negatively.

For HR technology vendors, recruiting platforms and workforce-management providers, the environment creates an interesting contradiction.

Employers may have fewer reasons to expand headcount rapidly, but that does not eliminate the need for talent technology. In a low-churn environment, organizations can become more focused on workforce productivity, internal mobility, skills visibility and targeted recruiting rather than simply increasing hiring volume.

That could favor HR platforms that help companies make better decisions about where to add workers, which skills they already possess internally and which positions genuinely require external recruitment.

Recruiting automation may also become more valuable when hiring volumes are moderate but organizations need to identify specialized candidates efficiently. AI-powered sourcing, candidate matching and workforce analytics can help recruiters focus limited hiring capacity on roles with the greatest business impact.

The same logic applies to retention.

When layoffs remain limited, employers have greater incentive to preserve institutional knowledge and retain critical employees. Workforce analytics can help identify turnover risks, while learning and development platforms can support internal movement into difficult-to-fill roles.

The July ETI therefore does not describe a labor market that is simply “strong” or “weak.” It describes one that is increasingly selective.

Employers appear reluctant to make large-scale hiring commitments, yet many businesses continue to report difficulty filling specific positions. Workers, meanwhile, face a market in which job opportunities remain available but may be less plentiful than during the post-pandemic hiring boom.

For HR leaders, that makes workforce planning more important than headline job-growth numbers alone.

The Conference Board’s index is not a forecast of a recession or a direct measure of payroll employment. It is an early signal of the direction of employment conditions. Its July rebound suggests that the labor market has not lost its underlying momentum, but its limited year-over-year growth indicates that a rapid hiring acceleration may not be imminent.

The emerging HRTech opportunity is to help organizations operate effectively within that middle ground: hiring selectively, retaining critical talent and using technology to understand where workforce investment will produce the greatest return.

Market Landscape

The latest ETI reading reinforces a labor-market environment in which employment is expanding, but at a measured pace. The Conference Board describes the backdrop as “low-hire, low-fire,” with job openings and employer difficulty filling positions providing evidence of continued demand, while unemployment claims remain comparatively low.

That environment is likely to keep HR teams focused on efficiency rather than simply expanding recruiting capacity.

Enterprise HCM platforms from Workday, Oracle, SAP and UKG, alongside specialized recruiting and workforce analytics providers, are increasingly competing on their ability to connect hiring data with workforce planning, skills management and employee retention.

The opportunity for HR technology is therefore broader than applicant tracking. Employers need systems that can answer questions such as where talent shortages exist, which skills can be developed internally and when external hiring is necessary.

The July data also highlight why a single labor-market metric can be misleading. Job openings remain elevated, small businesses report difficulty filling roles and layoffs remain limited, yet the overall pace of employment growth is modest.

For HR leaders, that combination favors targeted workforce investments over broad-based hiring expansion.

Top Insights

• The Conference Board’s July ETI rose to 107.71, signaling continued employment growth while its limited annual increase points toward modest payroll gains.
• Small businesses reporting unfilled positions reached 36%, while initial unemployment claims hit their lowest level since September 2022, indicating persistent labor demand.
• The low-hire, low-fire environment could push HR teams toward workforce analytics, internal mobility and targeted recruiting rather than broad headcount expansion.
• Job openings increased to an estimated 7.53 million, reinforcing demand for specialized talent despite slower overall employment growth across the U.S. economy.

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