{"id":385653,"date":"2026-01-03T15:28:14","date_gmt":"2026-01-03T15:28:14","guid":{"rendered":"https:\/\/www.newsbeep.com\/us\/385653\/"},"modified":"2026-01-03T15:28:14","modified_gmt":"2026-01-03T15:28:14","slug":"us-job-markets-great-freeze-may-end-in-2026-in-hiring-or-layoffs","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us\/385653\/","title":{"rendered":"US Job Market’s Great Freeze May End in 2026 \u2014 in Hiring or Layoffs"},"content":{"rendered":"

The frozen job market<\/a> could be heading into “a moment of reckoning” this year, said Claudia Sahm, the chief economist of New Century Advisors. <\/p>\n

The job market has been stuck in a low-hire, low-fire state, partly due to economic uncertainty, such as businesses figuring out how tariffs affect them<\/a>. It’s really up to employers to break the freeze \u2014 and how they do so could be either beneficial or disastrous for job seekers.<\/p>\n

Sahm sees the job market<\/a> going in one of two directions in 2026.<\/p>\n

One direction: “We really slow down in terms of hiring, and we hit a place where the bottom falls out. And it’s not just about slow hiring, it’s about firing workers and a recession.”<\/p>\n

The other: “The uncertainty lifts, they’re ready to pick up hiring, and you see things really stabilize and kind of look more like a labor market that we’ve been more used to in terms of the job opportunities and adding workers.”<\/p>\n

If layoffs increase, millions of people seeking a job would face even more competition. On the other hand, if hiring picks up across multiple sectors but layoffs remain low, that would be good news for unemployed Americans<\/a> or employees who have been waiting for more opportunities to arise.<\/p>\n

Sahm and other job-market experts think that at some point, the “Great Freeze” needs to break because it’s not sustainable, especially as workers retire and companies need to make up for that attrition.<\/p>\n

“At some point, something has to happen,” said Chris Martin, lead researcher at Glassdoor. “Even if what happens is that the bottom doesn’t fall out and conditions return to some level of stability, and we get a good idea of what world we’re going to be in, then I think we will end up in sort of a more typical labor market with a slight uptick in all of those fluidity dynamics \u2014 so more quits, more hires, more fires with all those being low now relative to what they were a decade ago.”<\/p>\n

The optimistic case: The hiring logjam could finally lift in 2026<\/p>\n

Some economists lean on the optimistic side and hope to see hiring pick back up this year.<\/p>\n

Aaron Terrazas, an independent economist, said he has spoken to businesses that were “paralyzed” by uncertainty in 2025, but he expects an uptick in job creation this year. Small business owners shared similar sentiments with Business Insider, such as Chicago-area hospitality business owner Michael Salvatore<\/a>, who said he has had to hold off on major decisions like expanding.<\/p>\n

“Especially as a small-business owner, the unknown makes it impossible<\/a> to have a vision that you can execute on,” Salvatore said, adding, “I’d rather the market crash and know that, ‘hey, we’re on a level playing field.”<\/p>\n

Terrazas believes that uncertainty could subside as we enter the Trump administration<\/a>‘s second year. He added investment provisions from the “One Big Beautiful Bill,” signed into law in July, would also be beneficial.<\/p>\n

Terrazas thinks that sometime in the first half of 2026, we should be “hitting the timeline when we start to see those investment provisions of the summer’s tax bill start to yield dividends in terms of projects and hiring.”<\/p>\n

Job-search platform ZipRecruiter found in a September survey of talent acquisition professionals that 63% of employers expect to hire more<\/a> moderately or significantly over the next year, down from the share that said this in 2024, but still a solid majority.<\/p>\n

Those worried about their job on the chopping block may feel some relief knowing layoffs haven’t been widespread. Laura Ullrich, the director of economic research in North America at the Indeed Hiring Lab, told Business Insider that at least for now, the “probability of getting laid off is pretty low” for most Americans.<\/p>\n

The layoffs and discharges rate had been hovering at or just above 1% in 2025, lower than the historical average of 1.4% despite some big household names making splashy layoff announcements<\/a>. Ullrich said the larger workforce challenge is actually finding a job.<\/p>\n

An Indeed Hiring Lab report on what could happen to the economy in 2026 said “the question won’t be whether the market thaws \u2014 it will be whether it cracks.”<\/p>\n

What happens to the healthcare sector would be important; it has largely supported the overall US economy’s monthly job growth in 2025. “If hiring remains strong in healthcare<\/a>, and job creation continues in line with rates observed in recent years, job openings could remain relatively high and unemployment could remain low, especially if conditions improve in other sectors,” the report said.<\/p>\n

The authors argued that this year’s “most probable outcome is not a dramatic break from current conditions, but an extension of today’s ‘low-hire, low-fire’ environment<\/a> in which both employers and job seekers face a slower, more selective market.”<\/p>\n

The pessimistic case: Layoffs could finally start happening en masse, with hiring still frozen<\/p>\n

A wide range of top executives have signaled that a hiring boom might not be coming in 2026 after all, and companies could instead be looking to trim head count. In the fourth-quarter survey from Business Roundtable, more CEOs said they expect no change or a decrease in their employment than those who said growth in the next six months.<\/p>\n

“Notably this quarter, more CEOs plan to reduce employment than increase it for the third quarter in a row \u2014 the lowest three-quarter average since the Great Recession,” Joshua Bolten, the CEO of Business Roundtable, said in a news release. “CEOs’ softening hiring plans reflect an uncertain economic environment in which AI is driving sizeable capex growth and productivity gains while tariff volatility is increasing costs, particularly for tariff-exposed companies, including small businesses.”<\/p>\n

Sahm said hiring surged at some businesses during the early pandemic recovery, so there hasn’t been a need for some employers to bring on a lot more people since then. Economists suspect some companies have even corrected their overhiring by conducting layoffs.<\/p>\n

Sahm said companies cutting back on hiring after staffing up isn’t sustainable, especially if people decide to retire<\/a>. “At some point, if you want to grow as a company, you’re going to have to bring in more workers,” she said.<\/p>\n

“My guess is that things will just get slightly more fluid,” Martin, the lead researcher at Glassdoor, said. “There is a chance that things get worse, but we haven’t seen really bad things happen to the market yet. The longer that things go on without really bad outcomes in the market, the more I think we’ll just return to business as usual.”<\/p>\n

How is your job search going? Reach out to this reporter to share your story at mhoff@businessinsider.com<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"The frozen job market could be heading into “a moment of reckoning” this year, said Claudia Sahm, the…\n","protected":false},"author":2,"featured_media":385654,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[36],"tags":[28,101],"class_list":{"0":"post-385653","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-business","9":"tag-economy"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/385653","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=385653"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/385653\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/385654"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=385653"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=385653"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=385653"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}