What will the job market hold in 2026?
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What insights do experts have about the labor market in 2026?
What we can tell you about jobs in 2026. I'm David Brancaccio in Los Angeles. If you have major financial decisions to make early in the new year, many will depend on our job situations, right? What do we know from the autumn here about the labor market this impending winter? We know the post-COVID hiring spree isn't happening at the time of tariffs. With unemployment rising now, Marketplace's Nova Safo takes a look. The labor market this year has cooled. The unemployment rate went from 4% to 4.6%. Wages, adjusted for inflation, actually stopped increasing in recent months. Michael Reed at RBC Capital Markets says there are multiple factors at play. The first is immigration policy. That's really slowing the supply of new workers who are coming into the U.S.
So a company looking to hire might not even be able to. The second is baby boomers retiring. Younger workers may be replacing them, but that doesn't count as new jobs created. Meanwhile, the big economic story of the year, higher tariffs, have left many employers reluctant to expand their workforces. There's a term that sprung up for this dynamic, low fire, low hire. We should expect that to be more the norm going forward. That's Mitchell Barnes, a labor markets economist at the Conference Board. We have really been marking our calendars for the first half of 2026 for really the full kind of suite of the tariff impacts to really roll through to businesses and therefore the labor market. Two bright spots, economists say, is that tax cuts Washington enacted this year will take effect next year, likely prompting consumers and businesses to spend more.
Also, the Federal Reserve is expected to keep cutting interest rates.
How are rising unemployment rates affecting job opportunities?
JP Morgan predicts all of this could boost hiring in the second half of next year. And economist Jeffrey Roach of LPL Financial agrees. When we work through the year, we'll see businesses... move past this tariff uncertainty, perhaps take advantage of some of the tax incentives for capital expenditures. As in, businesses could grow. And when they do, they tend to hire. Usually. But there's a big question mark about whether artificial intelligence is changing that dynamic with companies looking to do more with fewer workers. Preston Caldwell of Morningstar points out that white-collar jobs, office workers, have seen little to no growth in their ranks. We may be seeing increasing impact of AI now. Whether that's justified or not, I think companies think they could do a little bit more with less.
So I expect that to continue in 2026. Especially for young entry-level workers who saw their unemployment rate this year skyrocket to more than 9%, which means the labor market next year is expected to be much like the rest of the economy, growing slowly with gains unevenly distributed. I'm Novosafo for Marketplace. The Nasdaq stock market is asking the Securities and Exchange Commission for permission to do nearly round-the-clock trading. Marketplace's Justin Ho looked into who wants or needs this.
What factors are contributing to the slowdown in hiring?
If you were to wake up in the middle of the night with a sudden urge to buy a few shares of stock or an exchange-traded fund, that trade normally wouldn't take effect until markets open. Because in the wee hours of the morning? That market infrastructure is, quote-unquote, turned off. Haosheng Zhu is a finance professor at MIT and a former director at the SEC. He says there is demand for overnight trading from retail and international investors. For example, investors in Korea or Japan or Europe who wish to trade in the U.S. market when their time zone has daylight. Zhu says that's putting pressure on exchanges to offer a longer trading day. NASDAQ didn't comment for this story, but the exchange has said that global investors expect access on their terms.
There's also competition from other exchanges, says Campbell Harvey, a finance professor at Duke. It's possible to trade stocks, bonds, derivatives. There are many different venues that offer after-hour trading. Harvey says several fintech companies have offered overnight trading for years.
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