The job creation machine is running backwards in some industries and forward in others.

Structural changes spread across the US economy over time. AI is the big disruptor now, after the internet and the computerization-of-everything shook up the economy for decades. Automation-of-everything has been a force, now more so than ever. And some of those changes show up in shifts of employment.

The jobs in each industry are defined by work location. The primary activity at that facility determines the industry category. A worker at an Amazon fulfillment center would be under "transportation and warehousing," not "retail" and not "information." It's not the company that matters, but the work being done at that specific location. The data through August was released by the Bureau of Labor Statistics on Friday, based on its survey of employers.

The pattern in the numbers points to two forces running alongside each other: the AI and automation buildout is pulling hiring into construction, utilities, and factory construction, while the same technologies are cutting into information, retail, and parts of professional services — and a wave of federal downsizing is shrinking government payrolls at the same time.

Construction

Employment in construction spans all types, from single-family housing and highways to power plants and AI data centers, now spouting like mushrooms. Housing construction has run into a sharp decline in demand for single-family homes and overbuilding of multi-family units (apartments and condos) during the pandemic that are now flooding the market. The office sector has been in a depression. But construction in other sectors has been strong, and construction of data centers, factories, and power plants has been booming amid complaints of shortages of skilled labor.

Total employment: 8.36 million

Month-to-month: +22,000

3-month growth: +43,000

12-month growth: +120,000

Manufacturing

Manufacturing in the US is powered by automation. All manufacturers have been investing huge amounts of money in automation to reduce the costs and issues associated with human labor in the US. The manufacturing jobs that are left today tend to require high skills, often degrees, and include tech jobs.

Manufacturing production has been in expansion mode, and automation has been driving it – not employment of humans. Nevertheless, this year, more human labor has been getting put to work. That makes the recent gains notable against the longer-run trend in which output rises without proportional hiring.

Total employment: 12.6 million

Month-to-month: +16,000

3-month growth: +43,000

12-month growth: +23,000

Professional and business services

Professional and business services is a broad category that includes facilities whose employees work primarily in Professional, Scientific, and Technical Services; Management of Companies and Enterprises; Administrative and Support, and Waste Management and Remediation Services.

It includes jobs in tech and social media. And it includes government contractors that lost their contracts with the federal government in 2025.

The increasing use of AI has been held responsible for some job losses in this industry, but it has also been held responsible for quite a bit of hiring as companies are trying to deal with it and benefit from it.

The explosion of employment in 2021 and 2022 turned out to be widely acknowledged over-hiring that companies then unwound. The low point was in October 2024.

Total employment: 22.5 million

Month-to-month: +10,000

3-month growth: +62,000

12-month growth: +152,000

Information

"Information" is a small category that includes facilities where people primarily work on web search portals, data processing, data transmission, information services, software publishing, motion picture and sound recording, broadcasting including over the Internet, and telecommunications.

AI has had a profound impact in many of these activities for several years and is doing some real damage to human labor, including in the video and motion-picture industry, and in software publishing, where AI has taken over a lot of skilled human labor.

The tech and social media companies in that segment also had the issue of over-hiring during the pandemic, and they have admitted it, and they have reversed course.

Employment in this industry has fallen to the lowest level since 2015.

Total employment: 2.7 million

Month-to-month: -23,000

3-month growth: -37,000

12-month growth: -115,000

Healthcare and social assistance

No commentary was offered for this sector in the source, but the numbers stand out on their own: with a 12-month gain of 546,000, healthcare and social assistance is by far the largest job-adding industry in this report — more than three times the gain of the next-largest categories — making it the single biggest driver of overall employment growth. Demand in this sector is tied to an aging population rather than to tech or trade cycles, which distinguishes it from most other industries here.

Total employment: 23.9 million

Month-to-month: +28,000

3-month growth: +80,000

12-month growth: 546,000

Leisure and hospitality

Leisure and hospitality includes restaurants, bars, lodging, resorts, casinos, etc. In August, employment jumped, after two months in a row of steep declines that followed big increases. Some of this may be related to the World Cup and its aftermath.

Total employment: 17.0 million

Month-to-month: +62,000

3-month growth: -13,000

12-month growth: 131,000

Retail trade

Retail trade includes workers at brick-and-mortar retail stores, such as malls, auto dealers, grocery stores, gas stations, etc., and other retail locations such as markets. It does not include the tech-related jobs of ecommerce operations, drivers, and warehouse employees.

A big portion of this sector has been under pressure from ecommerce. Dozens of major retailers have been liquidated in bankruptcy court, some of which have been documented since 2016 in Wolf Street's Brick-and-Mortar Meltdown series. Innumerable malls have turned into zombie malls. Many of them were bulldozed and redeveloped into housing. The long-term decline in employment began in 2017.

The brick-and-mortar retailers that are still doing well are those that are selling groceries, motor vehicles, gasoline, and cannabis products.

Nevertheless, so far this year, brick-and-mortar retailers added jobs.

Total employment: 14.5 million

Month-to-month: +1,400

3-month growth: +24,200

12-month growth: 47,900

Financial activities

Financial activities include finance and insurance plus real estate renting, leasing, buying, selling, and management.

The damage here is largely in real estate related activities, including real estate brokering and mortgage lending, amid a massive four-year-long downturn in home sales, a plunge in purchase-mortgage originations, a collapse in refinance-mortgage originations, and a depression in the office sector and some other parts of commercial real estate.

Total employment: 9.1 million

Month-to-month: -11,400

3-month growth: -20,200

12-month growth: -99,000

Transportation and Warehousing

The source offered no commentary for this sector. The figures show a modest monthly gain against a 12-month decline of 51,500 — a swing consistent with the pattern elsewhere in this report of pandemic-era hiring being unwound while the logistics side of the AI and ecommerce buildout keeps adding work.

Total employment: 6.6 million

Month-to-month: +5,000

3-month growth: +8,500

12-month growth: -51,500

Wholesale Trade

Total employment: 6.1 million

Month-to-month: +7,800

3-month growth: +17,700

12-month growth: +29,100

Other services

"Other services" include equipment and machinery repairing; promoting or administering religious activities; grantmaking; advocacy; dry-cleaning and laundry services; personal care services; death care services; pet care services; temporary parking services; and dating services.

Total employment: 6.0 million

Month-to-month: +3,000

3-month growth: +4,000

12-month growth: +27,000

Arts, Entertainment, and Recreation

Total employment: 2.6 million

Month-to-month: -6,300

3-month growth: -42,900

12-month growth: -53,800

Utilities

Utilities – big in economic impact but small in employment – have seen a hiring boom since the AI infrastructure buildout started to demand limitless electrical power anywhere and everywhere. That hiring boom, which comes after years of declining employment, added 13% to their headcount in six years, taking employment at utilities from 541,000 in the summer of 2020 to 612,000 currently. It is one of the clearest examples in the dataset of AI's second-order effects: the technology cuts jobs in information and software even as it creates them in the power sector that feeds the data centers.

Total employment: 612,000

Month-to-month: +2,500

3-month growth: +4,100

12-month growth: +10,300

Government jobs

The federal government has shed 336,000 jobs, or 11% of its payrolls since January 2025. Government payrolls don't include workers at government contractors. They're in private-sector categories, such as in "Professional and business services," where declines cropped up as well in 2025.

State governments have shed 55,000 employees since January 2025. Local governments have added 157,000 jobs over the same period.

For all governments combined, their payrolls amount to a share of 14.7% of total nonfarm payrolls, compared to a share of 15.4% in August 2016 and compared to a share of 16.1% in August 2006.

Civilian employment at the federal government fell to a record low share of 1.7% of total employment, the lowest in the data going back to 1939.

Federal government

Total employment: 2.67 million

Month-to-month: -5,000

3-month growth: -11,000

12-month growth: -242,000

Since January 2025: -336,000 or -11.2%

State governments have also cut headcount, mostly in higher education due to slowing enrollment in universities and colleges.

State government

Total employment: 5.47 million

Month-to-month: -10,000

3-month growth: +3,000

12-month growth: -17,000

Since January 2025: -55,000

Local governments added to their headcount. The sharp ups and downs over the past three months netted out almost entirely and were likely due to a quirk in the seasonal adjustments over the summer months.

Most of the local government jobs are in education across all grade levels, from preschool to community colleges and trade schools; in healthcare; and in law enforcement and first-responders.

Local government

Total employment: 15.2 million

Month-to-month: +50,000

3-month growth: -2,000

12-month growth: +47,000

Since January 2025: +157,000

Source: Wolf Street