The labor market in 2026 is likely to feel different, but not unrecognizable. Across our consensus, upside and downside scenarios, unemployment, job openings, and GDP growth all remain within sight of where they are today — not too hot, not too cold, simply stable. The most probable outcome is not a dramatic break from current conditions, but an extension of today’s “low-hire, low-fire” environment in which both employers and job seekers face a slower, more selective market. The range of plausible outcomes is real, but so is the message from the data: big swings are unlikely.
But small changes in the aggregate can often feel like big changes around the margins. Demand has cooled from a year ago in nearly every professional sector, but the pullback has been uneven. Opportunities remain relatively plentiful in fields including civil engineering and healthcare, and in many small and mid-size MSAs, particularly in the Sunbelt and Mountain West. But job seekers in media, scientific R&D, and other harder-hit professional fields, and those in large coastal MSAs with slower population growth and more exposure to tech and professional services, are likely to face tougher conditions. In 2026, where you live and what you do will matter for your professional prospects at least as much as movements in top-line national trends.
The broader macroeconomic backdrop will also be defined by cross-currents. Consumer spending has so far kept GDP growth on solid ground, but it has increasingly been powered by higher-income households. Wage growth has cooled and inflation has eroded purchasing power for many lower- and middle-income workers. The full details and impacts of new tariff policies, immigration restrictions, and changes to federal spending are likely to remain uncertain for some time, and that uncertainty itself sits in the background of all our scenarios. Each of these forces has the potential to nudge the economy and labor market toward the upper or lower end of our forecast ranges, or, in the case of a particularly severe shock or beneficial breakthrough, beyond them.
For employers, this environment underscores the importance of being both disciplined and opportunistic. In tighter local or occupational labor markets, maintaining a competitive edge on pay, flexibility, and career development will remain critical to attracting and retaining talent. In areas or sectors where more candidates are chasing fewer jobs, employers may find an opportunity to raise the bar on hiring, invest in training, and rethink role design to better match evolving skills and business needs. For job seekers, a slower but still growing economy means that patience and persistence will be essential, as will a willingness to adjust search strategies — including where they look, which roles they consider, and which skills they choose to build.
This is a moment when timely, granular data matters more than ever. Official statistics will continue to provide an essential snapshot of where the economy is and has been. But in an era of heightened uncertainty and occasional data gaps, near real-time labor market information can help fill in the picture of where conditions may be headed. Indeed’s Job Postings Index, wage data, and local labor market indicators can give employers, job seekers, and policymakers a clearer view through the fog. We will continue to monitor these trends, refine our scenarios, and share new insights as the year unfolds.
Methodology
Our forecast scenarios were determined based on key assumptions about the relationship between a handful of economic variables:
Forecasted GDP growth relative to potential GDP growth
Sensitivity of the unemployment rate to GDP growth (Okun’s Law coefficient)
Sensitivity of job openings to the unemployment rate (the slope of the Beveridge Curve)
The numbers included in our downside scenario can provide a good example. Real year-over-year GDP growth of 0.9% in 2026 would represent a 1.1 percentage point (ppt) shortfall compared to the Congressional Budget Office’s latest estimates of potential GDP growth (2%). Based on estimates of an Okun’s Law of 0.45 — every 1 ppt shortfall in GDP growth compared to trend is associated with a 0.45 ppt increase in the unemployment rate — this slower pace of GDP growth translates to a 0.50 ppt rise in the estimated unemployment rate, from 4.3% at the end of 2025 to 4.8% by the end of 2026.
That projected change in unemployment is then applied to the Beveridge Curve. Based on the estimated, longer-term -0.52 slope of the Beveridge Curve from 2010-2019 (excluding periods when unemployment exceeded 6%), the job openings rate declines 0.52 ppt for every 1 ppt increase in the unemployment rate. Therefore, the 0.50 ppt rise in the unemployment rate translates to a 0.26 ppt decline in the job opening rate. We estimate the job openings rate and job openings level to stand at 4.3% and 7.2 million, respectively, by year-end 2025. This means a 0.26 ppt drop would leave the job openings rate at 4%, and job openings at 6.8 million at the end of 2026.
Credit: Indeed