The 2025 labor market has been generously described as “unstable,” with virtually no jobs growth and a slew of headwinds expected to conspire against it. In 2026, though, the buzzword seems to be “stable,” even though conditions seem to be largely the same.
The picture continues to be of a low-hire, low-fire climate, where companies are both reticent to lay off employees as demand continues to be strong, but also are leery of adding staff amid uncertainty over tariffs, inflation and geopolitics.
However, characterizations coming from Federal Reserve officials and market economists have grown at least a bit more optimistic — stressing the stability, if not the robustness, of the labor market.
The difference between this year and last? Expectations.
A prevailing belief is that with the clampdown on immigration and other factors holding back labor pool growth, a subdued hiring rate is fine — at least for now — and the current pace of job growth is adequate and even expected.
