The U.S. labor market, and unemployment in particular, is a focus for business media and the Fed. Employers continue to report millions of open positions and layoffs remain low, while hiring has slowed and employees are changing jobs less frequently.
One of the most useful ways economists assess these dynamics is through the Job Openings and Labor Turnover Survey (JOLTS). This data was among the indicators discussed during First American’s recent 2026 U.S. economic forecast webinar with Gerard Cassidy, Managing Director at RBC Capital Markets.¹
For the equipment finance industry, the data can also provide important context for how businesses are thinking about capacity, productivity, and capital investment.
—
JOLTS Reveals Important Data on Quits
Traditional employment measures provide an important snapshot on the percentage of the labor force that is employed. JOLTS goes a level deeper by showing the movement within the labor market. Job openings indicate employer need for workers, hires show how much of that demand is converting into additional headcount, and layoffs reveal whether businesses are actively reducing their workforces. But perhaps the most interesting data point is the “quits” rate.
While it may be counterintuitive, a strong quits number means workers are finding new opportunities with other employers, which is associated with higher wages as employees advance their careers. This makes the quits rate an indicator of labor market mobility and worker confidence. It also provides useful context around future wage pressure for businesses, which can put increased focus on automation and productivity projects.
What the Current Data Is Telling Us
According to the Bureau of Labor Statistics, U.S. employers reported 7.3 million job openings in July 2026. Employers hired 5.1 million workers, while 1.7 million employees were laid off or discharged. Interestingly, quits came in at 3.1 million, which at 1.9% is near the 10-year low. It appears the U.S. workforce, when given the choice, is choosing to stay with their current employer, despite 7.3 million job openings available.²
This suggests the broader picture is one of slower movement rather than widespread workforce reduction. The Federal Reserve described labor supply and labor demand as subdued but roughly in balance, with job vacancies relatively stable and layoffs remaining low.³
What JOLTS Signals for CapEx
For equipment finance leaders, the current labor trends raise an important question: how will businesses create additional capacity if headcount does not grow at the same pace?
Beyond adding labor, acquiring new equipment and technology is another common strategy to expand capacity. In a slower hiring environment, investments that improve productivity can take on greater importance. Automation, advanced manufacturing equipment, robotics, software, AI implementations, and other technologies can help organizations increase output and expand capabilities without requiring headcount to grow proportionally.
JOLTS isn’t a measure of capital spending, and slower hiring can also reflect weaker demand or broader uncertainty. But it does provide useful context. If businesses continue pursuing growth without accelerating headcount, productivity becomes a more important part of the equation.
Capital Investment Remains Strong
Recent equipment finance data adds another dimension. ELFA’s July 2026 CapEx Finance Index reported $14.3 billion in seasonally adjusted new business volume, 24.5% above the previous all-time monthly high. Year-to-date volume increased 16.8% compared with 2025, with ELFA highlighting AI-related investment as a strong contributor to the July surge.⁴
The Federal Reserve has also reported stronger productivity growth compared with the previous business cycle. Since late 2019, business-sector labor productivity has grown at an average annual rate of 2.1%, compared with an average of 1.5% from late 2007 through late 2019. The Fed attributes this to several factors, including businesses’ investments in labor-saving technologies and high-tech capital to improve efficiency.3
Taken together, the data shows that businesses can remain measured about hiring while continuing to deploy significant capital. Increasingly, the business case for CapEx may center not simply on adding capacity, but on what an investment allows an existing workforce to accomplish.
—
Looking Ahead
The direction of JOLTS, and the quits rate in particular, will provide important context for both the economic outlook and the CapEx environment. If job openings continue to normalize while layoffs remain low, businesses may remain in a period of measured growth where productivity and efficiency investments continue to support expansion.
A sustained increase in layoffs would change that picture, particularly if hiring remains subdued. For now, however, the labor market remains broadly stable rather than showing the widespread workforce reductions typically associated with contraction or automation gains.
For equipment finance leaders, JOLTS offers a window into how businesses are balancing people and capital—and how that balance could shape the next phase of equipment investment. It also provides valuable insight on the strength and sentiment of the current labor force, which will impact future labor costs for customers.
SOURCES
- 1Gerard Cassidy, 2026 U.S. Economic Forecast Webinar with First American Equipment Finance, July 2026.
- 2S. Bureau of Labor Statistics, Job Openings and Labor Turnover
- 3Board of Governors of the Federal Reserve System, Monetary Policy Report, July 2026.
- 4Equipment Leasing & Finance Association, CapEx Finance Index: July 2026.
ABOUT FIRST AMERICAN EQUIPMENT FINANCE
First American Equipment Finance is a wholly owned subsidiary of City National Bank, an RBC Company. Ranked by Monitor as one of the largest equipment finance companies in the United States, First American provides equipment financing solutions to established commercial borrowers nationwide.
