The aggregate number looks fine. As of August 14, 2026, Indeed's Job Postings Index stood at 101.8, meaning job listings on the platform are running 1.8% above their pre-pandemic February 2020 baseline. If you are reading headlines, the labor market looks stable.
If you recruit software engineers, the aggregate number is lying to you.
Indeed's August 2026 Hiring Lab snapshot, published August 24, puts the software development sector's JPI at 74.4. That is 25.6% below the pre-pandemic baseline. Not a dip. Not a correction. A structural reduction in the volume of job postings for an entire occupational category, and one that shows no sign of returning to where it was.
How We Got Here
Software development postings hit their low point in May 2025, when the sector index fell to 61.1 - nearly 39% below the pre-pandemic level. The recovery since then has been real. The index has climbed from that trough to 74.4, a gain of roughly 22%.
But 74.4 is still well below 100. And the path back, if there is one, is narrow.
The decline started in late 2022 as the post-pandemic hiring surge faded and tech companies began aggressive headcount reductions. AI coding tools accelerated it through 2024 and into 2025. Companies were producing more engineering output from smaller teams. The demand for net new headcount dropped accordingly.
Overall job postings across all sectors followed a similar pattern - falling from a peak of roughly 160 in early 2022 to the 101.8 level today. But most sectors have returned near their baselines. Software development has not.
The Recovery Belongs to Senior Roles
What makes the current moment important is that a recovery is happening. It is just concentrated at one end of the seniority spectrum.
According to Indeed Hiring Lab's analysis, 71% of the increase in software development postings between May 2025 and May 2026 came from senior roles. Junior developer postings remain significantly below their 2022 peak. Entry-level software hiring at large tech companies has fallen sharply from 2019-era baselines, driven in large part by AI tools handling the routine work those roles once performed.
Additionally, 37% of the increase in postings is from jobs that explicitly mention AI in the title or core requirements, according to the same Indeed Hiring Lab data. The category recovering is not "software developer." It is "senior software engineer who can direct, review, and extend AI-generated code."
That is a different job. It requires a different candidate. And it exists in smaller volume than the coding roles that filled pipelines before 2023.
For recruiters, this is the structural fact that matters most: the junior talent pipeline that used to feed software organizations has been turned off. Entry-level roles are not posting. New grads are not entering the industry at anything close to historical rates. The traditional career ladder in software has lost its bottom rung, and that loss is not temporary.
Where the Broader Market Is Actually Hiring
The Indeed snapshot also surfaces a sector divergence that matters for any recruiter treating "the labor market" as a single thing.
Production and manufacturing postings are up 8% year over year as of August 2026, per Indeed. Loading and stocking postings are up 11%. These are categories where AI-driven automation has displaced fewer workers than expected, and where physical execution still requires human presence. Separately, iCIMS's August 2026 Workforce Report documented manufacturing job openings climbing 29% above the prior-year baseline, with applications up but actual hires still falling - a conversion problem, not a demand problem.
Healthcare, meanwhile, is cooling. For three years, healthcare recruiting operated in a market where demand outpaced supply almost automatically. The August 2026 Indeed data shows healthcare postings moving lower - not collapsing, but no longer the self-sustaining shortage market it was through 2022 and 2023.
The implication for healthcare recruiters: the easy conditions are ending. Roles that posted and filled through simple visibility will need active sourcing again.
What the Wage Data Adds
Posted wages across all sectors rose 2.5% year over year as of July 2026, according to Indeed Hiring Lab. Salaried roles saw 2.9% growth between Q1 2025 and Q1 2026. Hourly roles grew at only 1.7% over the same period. The Q2 2026 Employment Cost Index showed that real inflation-adjusted wages for private-sector workers fell for the first time, meaning wage growth is no longer keeping pace with prices for most workers.
For software development specifically, the compensation picture has bifurcated. Senior roles with demonstrated AI skills command a meaningful premium - Indeed Hiring Lab previously documented a roughly 56% wage premium for roles requiring AI skills relative to comparable roles without that requirement. Junior roles, where posting volume is already thin, face wage stagnation because supply of applicants exceeds the demand that remains.
The market is not shrinking uniformly. It is shrinking at the bottom and expanding at the top.
Three Adjustments Recruiters Should Make Now
Stop treating software developer as one market. The posting data shows it has split into two: senior and AI-oriented roles with real demand and strong pay, and junior roles with structurally reduced volume and compressed wages. If your candidate mix skews entry-level, you need to develop senior pipelines or find a different vertical.
Follow the volume, not the narrative. Manufacturing and logistics have real demand right now. If you have not built relationships with hiring managers in those sectors, you are leaving a growing market to recruiters who did.
Reset your expectations for healthcare. For three years, healthcare hiring ran on favorable conditions. That is softening. Demand is still large by historical standards, but passive sourcing will not cut it the way it did in 2023 and 2024. Active outreach, competitive compensation benchmarking, and retention-focused conversations with current clients will matter more in H2 2026.
The aggregate JPI at 101.8 says the labor market is roughly fine. That reading is accurate if you look at everything together. But recruiters do not hire everything together. They hire in specific sectors and specific roles.
In software development, the market in August 2026 is about a quarter smaller than it was before the pandemic - and the piece that is growing belongs to senior engineers who know how to work with AI. Build your pipeline around that reality, not the one from 2021.
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