Marketplace Morning Report: "What will the job market hold in 2026?"

Host: David Brancaccio
Date: December 18, 2025

Main Theme

This episode centers on the outlook for the U.S. job market in 2026, exploring factors influencing employment trends—such as immigration, tariffs, demographic shifts, government policy, and the growing influence of artificial intelligence. The episode also touches on proposals for round-the-clock stock trading, a notable media-fusion company merger, rising energy costs, and developments at the Consumer Financial Protection Bureau (CFPB).

Key Discussion Points and Insights

1. Job Market Outlook for 2026

(00:59–04:08)

• Labor Market Cooling Off:

  • The post-pandemic hiring spree has ended; unemployment has risen from 4% to 4.6%.

    "Wages, adjusted for inflation, actually stopped increasing in recent months." – Nova Safo (01:26)

• Influencing Factors:

  • Immigration policy:

    "That's really slowing the supply of new workers who are coming into the US." – Michael Reed, RBC Capital Markets (01:43)

  • Retirement:
    • Baby boomers retiring, with younger workers replacing them but not creating new jobs.
  • Tariffs:
    • High tariffs leading to employer reluctance to increase hiring.

      "There's a term that sprung up for this dynamic: low fire, low hire." – Michael Reed (01:51)

• Expert Consensus:

  • The low hiring trend is likely to continue, as the full effects of tariffs are expected to roll through the economy in early 2026.

    "We should expect that to be more the norm going forward." – Mitchell Barnes, Conference Board economist (02:15) "We've been marking our calendars for the first half of 2026 for really the full kind of suite of the tariff impacts." – Mitchell Barnes (02:23)

• Potential Bright Spots:

  • Tax cuts and anticipated Federal Reserve interest rate cuts may boost hiring in the second half of 2026.

    "JP Morgan predicts all of this could boost hiring in the second half of next year." – Michael Reed (02:36)

    • Businesses could act on tax incentives for capital expenditures; growth might follow.

      "When they do, they tend to hire—usually." – Jeffrey Roach, LPL Financial (approx. 03:10)

• AI’s Growing Role:

  • Increasing use of AI may slow job growth, especially for white-collar occupations.

    "White collar jobs—office workers—have seen little to no growth in their ranks." – Preston Caldwell, Morningstar (03:15) "Companies think they could do a little bit more with less." – Mitchell Barnes (03:36)

• Entry-Level Worker Impact:

  • Entry-level unemployment rates have risen above 9%, suggesting a tough market for young workers.

    "Especially for young entry level workers who saw their unemployment rate this year skyrocket to more than 9%." – Michael Reed (03:47)

  • The labor market is expected to experience slow, uneven growth in 2026.

2. Nasdaq Pushes for 24-Hour Trading

(04:08–05:39)

• Extended Trading Proposal:

  • Nasdaq asks the SEC for permission to provide near round-the-clock trading.
  • Designed to serve retail and international investors with demand for off-hours trading.

    "If you were to wake up in the middle of the night with a sudden urge to buy a few shares... that trade normally wouldn't take effect until markets open." – Nova Safo (04:18)

  • MIT’s Hao Sheng Zhu highlights pressure from global time zones and international investors.

    "Investors in Korea or Japan or in Europe... wish to trade in the US market when their time zone has daylight." – Hao Sheng Zhu, MIT (04:43)

• Industry Shift:

  • Competitor exchanges, like NYSE and CBOE, plan extended hours too.

    "The traditional exchanges have been slow to change and I think at this point Nasdaq doesn't have any choice." – Campbell Harvey, Duke (05:21)

3. Media-Fusion Company Merger

(05:39–06:51)

• High-Profile Deal:

  • President Trump’s media company announces a $6 billion merger with TAE Technologies, a fusion energy company.

    "The plan, at least, is to focus on artificial intelligence and energy production." – David Brancaccio (05:39)

  • Fusion energy’s feasibility remains unproven, per scientists.

• Energy Costs:

  • Cost of heating expected to climb significantly this winter:
    • Electricity: +12%
    • Natural Gas: +8.4%
    • Oil Heat: Nearly as high as electricity
    • Natural gas prices are up 50% year-over-year, partly due to record LNG exports.

4. CFPB Developments

(07:48–08:47)

• Court Ruling:
  • A federal appeals court blocked the Trump administration from mass layoffs at the CFPB, pending a ruling next year.

    "The court will hear oral arguments in the case this February and block those dismissals in the meantime." – Nancy Marshall Genser (08:05)

  • Senator Elizabeth Warren stresses CFPB’s importance; funding remains uncertain as its budget depends on Federal Reserve surpluses.

Notable Quotes & Memorable Moments

• "There's a term that sprung up for this dynamic: low fire, low hire."
  — Michael Reed (01:51)
• "We have really been marking our calendars for the first half of 2026 for really the full kind of suite of the tariff impacts to really roll through."
  — Mitchell Barnes (02:23)
• "Companies think they could do a little bit more with less. So I expect that to continue in 2026."
  — Mitchell Barnes (03:36)
• “If you were to wake up in the middle of the night with a sudden urge to buy a few shares ... that trade normally wouldn’t take effect until markets open.”
  — Nova Safo (04:18)
• "The traditional exchanges have been slow to change and I think at this point Nasdaq doesn't have any choice."
  — Campbell Harvey (05:21)
• "The plan, at least, is to focus on artificial intelligence and energy production."
  — David Brancaccio (05:39)

Timestamps for Important Segments

• 00:59 – Job market analysis begins (David Brancaccio introduces segment)
• 01:26 – Labor market cooling, expert commentary
• 02:15 – Tariffs and hiring dynamics explained
• 02:36 – Effects of tax cuts and Fed rate cuts predicted
• 03:15 – Impact of AI on white-collar jobs
• 03:47 – Entry-level unemployment rates, 2026 labor market outlook
• 04:08 – Nasdaq’s 24-hour trading initiative
• 05:39 – Trump media/TAE fusion merger, heating cost outlook
• 07:48 – CFPB layoffs court case and funding crisis update

Conclusion

This episode delivers a concise but detailed briefing on the evolving U.S. labor market and business environment as 2026 approaches. It raises concerns about uneven job growth, uncertainty stemming from tariffs and AI adoption, and the struggles of younger workers. In parallel, it reports on industry shifts toward 24-hour trading, a surprising media-energy company merger, and policy uncertainty regarding consumer financial protection. The tone is pragmatic, direct, and underscores the interconnectedness of economic, political, and technological trends shaping listeners’ financial futures.