How was the job market in 2025—and what might change in 2026?

12.30.2025 | Blog

If 2024 felt like “everyone’s hiring,” 2025 was more like “the labor market hit pause.”

You still saw people working, companies still posting roles, and paychecks still moving—but the momentum changed. Hiring got more selective, job openings cooled, and for many job seekers the process felt slower and more competitive.

Let’s break it down with hard numbers, then look at 2026 forecasts from a few different angles.

2025 in one sentence: cooler, tighter, and slower to move

Fewer “easy wins” for job seekers

The biggest story of 2025 wasn’t mass layoffs—it was slower hiring.

A clean snapshot comes from the BLS Job Openings and Labor Turnover Survey (JOLTS). In October 2025:

  • Job openings: 7.7 million
  • Hires: 5.1 million (3.2% hires rate)
  • Quits: 2.9 million (1.8% quits rate)
  • Layoffs & discharges: 1.9 million (1.2% layoffs/discharges rate)

That mix is important: layoffs weren’t exploding, but the engine (hiring + openings) wasn’t roaring either. Bureau of Labor Statistics

Unemployment rose, but not like a recession spike

In the most recent official snapshot for 2025 (released in December due to the shutdown-related delays), the BLS reported that in November 2025:

  • Unemployment rate: 4.6%
  • Unemployed people: 7.8 million
  • Payrolls: +64,000 (and “little net change since April”)

So: unemployment drifted up, job growth slowed, and the market became less forgiving. Bureau of Labor Statistics+1

Why job searching felt worse than the headline numbers

This is the “vibes vs. data” gap:

  • If openings are down, fewer people get interviews.
  • If hiring slows, processes stretch out and competition per role jumps.
  • If quits slow, fewer seats open up (people stay put).
  • Meanwhile, layoffs can still feel scary in specific sectors even if the national rate looks stable.

2026 forecasts: what different sources are saying (and why they differ)

No one can “know” the 2026 job market. But we can gather forecasts from credible institutions and compare assumptions.

1) Professional economists: slower job growth + slightly higher unemployment

The Philadelphia Fed Survey of Professional Forecasters (SPF) (Nov 17, 2025 release) projects:

  • Unemployment (annual average): 4.5% in 2026 (up from 4.2% in 2025)
  • Payroll growth: about 55,200 jobs/month in 2026 (down from 125,100 jobs/month in 2025)
  • They also estimate quarterly unemployment around 4.5% through much of 2026. Federal Reserve Bank of Philadelphia

This is a “cooling but not collapsing” baseline.

2) Labor-market analysts using real-time posting data: openings may stabilize, not surge

Indeed Hiring Lab’s 2026 Jobs & Hiring Trends message is basically:

  • Job openings may stabilize (not meaningfully grow)
  • Unemployment likely rises, but not “alarmingly”
  • Growth stays positive but “anemic”

That’s consistent with a market where hiring exists—but you need to be sharper to win. Indeed Hiring Lab

3) Private research / business outlooks: early 2026 could feel sluggish

The Conference Board’s U.S. forecast notes unemployment rising toward ~4.7% in early 2026 in their view. The Conference Board

Some media summaries of bank forecasts also describe the first half of 2026 as “slow growth” for jobs, which matches the general “soft labor market” theme. Fortune

What this means if you’re job hunting in 2026

If 2026 really is a “slower-but-still-alive” market, here’s the practical translation:

  • Expect fewer interviews per application → your resume + targeting matters more.
  • Expect longer cycles (more steps, more waiting, more internal approvals).
  • Expect more value on proof: measurable wins, clear scope, tools, outcomes.
  • Expect certain pockets to stay strong even if the overall market is soft (healthcare, some construction/infra, specialized technical roles—varies by region).

The part that sucks (but is freeing): you can’t control macro

The job market is macro. It moves because of interest rates, company budgets, consumer demand, industry cycles, and policy shocks—stuff that isn’t in your control.

That reality can feel unfair. But the best response is also simple:

Gather information, stay ready, and position yourself so you can move fast when an opportunity appears.

In a slower market, “ready” beats “reactive” every time.