Catenaa, Saturday, June 27, 2026- Economists see the job market staying steady throughout 2026, assuming the economic disruptions from the war in Iran continue to fade.
The unemployment rate has remained low by historical standards at 4.3% in May, but job opportunities and hiring remain subdued. Many forecasters expect it to stay right where it is. However, forecasters anticipated varying levels of monthly job growth.
The job market has proven resilient to recent upheavals, including tariffs and the Iran war’s energy shock, and many forecasters expect that resilience to continue in the second half of the year, supporting consumer spending and overall economic growth.
Economists at Goldman Sachs are among those who see the job market staying on its current trajectory, although they anticipate slower employment growth than in recent months.
They think US employers will likely add 60,000 jobs per month in the second half of the year, less than a third of the rate they did in March, April, and May, which all featured unexpectedly high job gains in the six figures. That would be slightly more than required to keep the unemployment rate stable, by Goldman’s estimation.
Similarly, forecasters at Fannie Mae expect the unemployment rate to remain at 4.3% for the rest of 2026 and on through 2027. At Wells Fargo, economists anticipate about 95,000 jobs will be added per month, with the unemployment rate remaining steady at 4.3%.
If those forecasts are correct, the job market would end 2026 in much better shape than it did in 2025, when tariffs and economic uncertainty had pushed job growth to its lowest outside a recession since 2003.
However, some forecasters believe the recent improvement is more fragile than it seems on paper.
For instance, Samuel Tombs, chief U.S. economist at Pantheon Macroeconomics, expects the unemployment rate to climb to about 4.75% by the end of the year. Among other reasons, Tombs sees red flags in recent surveys of small business owners who say they are scaling back their hiring plans after being hit harder by tariffs than their larger counterparts.
Similarly, forecasters at S&P Global believe the labor market is on a fragile footing, with the unemployment rate to rise to 4.6% by the end of the year. S&P analyst Satyam Panday noted that recent job gains have been limited to a few industries, suggesting the overall market is vulnerable to a slowdown.
“The strength is real but narrow: leisure and hospitality and local government accounted for roughly three-quarters of the May gain, while the cyclical private core (manufacturing, construction, professional services) was little changed and financial activities continued to shed jobs,”
Other experts see the job market improving significantly as the year goes on. Forecasters at JP Morgan, led by Hussein Malik, Head of Global Research, expect the unemployment rate to drop to 4.1% by the end of the year and edge down to 4% by 2027.
“We expect the labor market to remain on a solid footing,” he wrote.
