Workers outside of health care, in particular, have had a difficult go of it.
This year was a difficult one for Americans looking for work. Forecasters don’t see much improvement in their prospects coming in 2026.
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.
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.
“A lot of the GDP growth we’re getting is from AI infrastructure investments, which don’t generate very many jobs, and there’s some displacement from AI,” said Diane Swonk, chief economist at KPMG. “We don’t know how much that is yet. It looks like it’s only the beginning phases of it.”
While economists say the U.S. isn’t 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% — a rare development outside of business-cycle downturns.
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.
Hiring rates, meanwhile, looked even worse — 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’ malaise about the job market.
