{"id":400,"date":"2025-12-26T13:44:00","date_gmt":"2025-12-26T13:44:00","guid":{"rendered":"https:\/\/wholesalemicro.com\/index.php\/2025\/12\/26\/americans-facing-a-tough-job-market-in-2025-wont-get-a-break-next-year\/"},"modified":"2025-12-26T13:44:00","modified_gmt":"2025-12-26T13:44:00","slug":"americans-facing-a-tough-job-market-in-2025-wont-get-a-break-next-year","status":"publish","type":"post","link":"https:\/\/wholesalemicro.com\/index.php\/2025\/12\/26\/americans-facing-a-tough-job-market-in-2025-wont-get-a-break-next-year\/","title":{"rendered":"Americans facing a tough job market in 2025 won\u2019t get a break next year"},"content":{"rendered":"

By Jarrell Dillard, Bloomberg News<\/strong><\/p>\n

This year was a difficult one for Americans looking for work. Forecasters don\u2019t see much improvement in their prospects coming in 2026.<\/p>\n

The unemployment rate is set to remain elevated through almost all of next year despite solid economic growth, according to economists surveyed by Bloomberg. That unusual combination owes to the growing role of investments in artificial intelligence in powering the expansion without boosting hiring, some say.<\/p>\n

A stagnant labor market likely means another year of limited job opportunities and cooling wage increases, exacerbating affordability concerns for American families heading into the midterm elections. It also spells an even greater reliance on the health-care sector, which accounted for nearly all job growth in 2025.<\/p>\n

\u201cA lot of the GDP growth we\u2019re getting is from AI infrastructure investments, which don\u2019t generate very many jobs, and there\u2019s some displacement from AI,\u201d said Diane Swonk, chief economist at KPMG. \u201cWe don\u2019t know how much that is yet. It looks like it\u2019s only the beginning phases of it.\u201d<\/p>\n

While economists say the U.S. isn\u2019t in a recession, the second half of 2025 probably felt like it for many job-seekers. In the five months from June to November, the unemployment rate rose half a percentage point, to 4.6% \u2014 a rare development outside of business-cycle downturns.<\/p>\n

Those with four-year college degrees were hit particularly hard, reflecting an ongoing hiring freeze across so-called white-collar occupations. While their unemployment rate remains somewhat below that for lesser-educated workers, young college graduates have seen their historical advantage in the job search disappear this year.<\/p>\n

Hiring rates, meanwhile, looked even worse \u2014 low enough that, in decades past, they would have been consistent with even higher levels of unemployment. And layoff announcements have picked up in recent months, adding to Americans\u2019 malaise about the job market.<\/p>\n

Workers outside of health care, in particular, have had a difficult go of it: Excluding that sector, nonfarm payroll employment actually fell in the first 11 months of 2025.<\/p>\n

There are some positives for the outlook. The Federal Reserve has cut interest rates this year and is expected to continue doing so in 2026, and tax cuts alongside some potential easing in the Trump administration\u2019s trade policies \u2014 a major source of uncertainty for small businesses this year \u2014 should also help, said Michael Pugliese, a senior economist at Wells Fargo & Co.<\/p>\n

But first, there is \u201cprobably still a little more labor-market weakening to go, whether that\u2019s another tick or two higher in the unemployment rate,\u201d Pugliese said.<\/p>\n

All of that has already added up to slower wage growth as the balance of power in the labor market has continued to shift from workers to employers. It\u2019s a sharp turnaround from 2022 and 2023, when workers had the upper hand and employers were forced to offer higher pay to attract talent.<\/p>\n

A Harris Poll conducted for Bloomberg News in October showed 55% of employed Americans were concerned about losing their jobs, and nearly half said they thought it would take at least four months to find a new job of similar quality if they lost their current position.<\/p>\n

Various measures of wage growth show pay is now rising at the slowest rate in four years, and low-earners are seeing pay rise by less than top earners \u2014 worsening the so-called \u201cK-shaped economy\u201d trend of widening inequality this year.<\/p>\n

That\u2019s a risk for Republicans, who were elected to majorities last year in part due to widespread anger over rising prices that exacerbated cost-of-living concerns, as they head into the 2026 campaign season.<\/p>\n

\u201cOverall wage growth will likely come close to the pace of inflation, and likely maybe even go a little above overall inflation,\u201d KPMG\u2019s Swonk said. \u201cBut the problem is the distribution of wages.\u201d<\/p>\n