What will the job market hold in 2026?

Summary

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

Host: David Brancaccio
Date: December 18, 2025

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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).

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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.

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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)

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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

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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.

Transcript

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[David Brancaccio]

Under approval what we can tell you about jobs in 2026 I'm David Brancaccio in Los Angeles. If you have major financial decisions to make early in the new year, many will depend on our job situations, right? What do we know from the autumn here about the labor market this impending winter? We know the post Covid hiring spree isn't happening at the time of tariffs, with unemployment rising now, marketplaces novasafo takes a look.

[Michael Reed]

The labor market this year has cooled. The unemployment rate went from 4% to 4.6%. Wages, adjusted for inflation, actually stopped increasing in recent months. Michael Reed at RBC Capital Markets says there are multiple factors at play.

[Nova Safo]

The first is immigration policy. That's really slowing the supply of new workers who are coming into the US.

[Michael Reed]

So a company looking to hire might not even be able to. The second is baby boomers. Retiring younger workers may be replacing them, but that doesn't count as new jobs created. Meanwhile, the big economic story of the year higher tariffs have left many employers reluctant to expand their workforces. There's a term that sprung up for this dynamic low fire, low hire.

[Mitchell Barnes]

We should expect that to be more the norm going forward.

[Michael Reed]

That's Mitchell Barnes, a labor markets economist at the Conference Board.

[Mitchell Barnes]

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 to businesses and therefore the labor market.

[Michael Reed]

Two bright spots, economists say, is that tax cuts Washington enacted this year will take effect next year, likely prompting consumers and businesses to spend more. Also, the Federal Reserve is expected to keep cutting interest rates. JP Morgan predicts all of this could boost hiring in the second half of next year. And economist Jeffrey Roach of LPL Financial agrees. When we work through the year, we'll see businesses move past this tariff uncertainty, perhaps take advantage of some of the tax incentives for capital expenditures. As in, businesses could grow and when they do, they tend to hire usually. But there's a big question mark about whether artificial intelligence is changing that dynamic, with companies looking to do more with fewer workers. Preston Caldwell of Morningstar points out that white collar jobs office workers have seen little to no growth in their ranks.

[Mitchell Barnes]

We may be seeing increasing impact of AI now, whether that's justified or not. I think companies think they could do a little bit more with less. So I expect that to continue in.

[Michael Reed]

2026, especially for young entry level workers who saw their unemployment rate this year skyrocket to more than 9%, which means the labor market next year is expected to be much like the rest of the economy, growing slowly with gains unevenly distributed. I'm Nova Safo for Marketplace.

[David Brancaccio]

The Nasdaq Stock Market is asking the securities and Exchange Commission for permission to do nearly round the clock trading. Marketplace's Justin Ho looked into who wants or needs this.

[Nova Safo]

If you were to wake up in the middle of the night with a sudden urge to buy a few shares of stock or an exchange traded fund, that trade normally wouldn't take effect until markets open because in the wee hours.

[Mitchell Barnes]

Of the morning, that market infrastructure is quote, unquote turned off.

[Nova Safo]

Hao Sheng Zhu is a finance professor at MIT and a former director at the sec. He says there is demand for overnight trading from retail and international investors.

[Mitchell Barnes]

For example, investors in Korea or Japan or in Europe who wish to trade in the US Market when their time zone has daylight.

[Nova Safo]

Zhou says that's putting pressure on exchanges to offer a longer trading day. Nasdaq didn't comment for this story, but the exchange has said that global investors expect access on their terms. There's also competition from other exchanges, says Campbell Harvey, a finance professor at Duke.

[Mitchell Barnes]

It's possible to trade stocks, bonds, derivatives. There are many different venues that for after hours trading.

[Nova Safo]

Harvey says several fintech companies have offered overnight trading for years.

[Mitchell Barnes]

The traditional exchanges have been slow to change and I think at this point Nasdaq doesn't have any choice.

[Nova Safo]

The New York Stock Exchange and the Chicago Board Options Exchange are planning to extend their hours as well. I'M Justin Ho for Marketplace.

[David Brancaccio]

There's word just now from the Reuters news agency that President Trump's media company will merge with a fusion energy company called Ta Tae Technologies in a $6 billion deal. So far we know that the plan, at least, is to focus on artificial intelligence and energy production. TAE says it's been in the fusion field for 25 years. The feasibility of fusion power, scientists say, is not yet demonstrated. Markets S and P futures are up 0.5% Nasdaq futures up 0.8% now and these numbers the cost of heating for this winter now projected to be up 9.2%. For houses that heat with electricity, it'll be up more than 12%. For Natur Natural gas, just slightly less than oil heat, and is projected to rise 8.4% this winter. These numbers are from the National Energy Assistance Directors Association. Natural gas prices are up 50% in the last year. It has been colder. But another major factor is record exports of liquefied natural gas.

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[David Brancaccio]

For now, a federal appeals court has blocked the Trump administration from firing most of the people at the Consumer Financial Protection Bureau. The court plans a new ruling on this next year. The agency's funding, meanwhile, is up in the air. Marketplace's Nancy Marshall Genser has that the.

[Nancy Marshall Genser]

U.S. circuit Court for the District of Columbia struck down an earlier decision, which allowed mass layoffs at the cfpb. The court will hear oral arguments in the case this February and block those dismissals. In the meantime, Senator Elizabeth Warren, a Massachusetts Democrat who is the main architect of the CFPB, said the agency has returned more than $21 billion to Americans who were, quote, scammed by big banks. She added, the courts must follow the law. Meanwhile, the CFPB is about to run out of money. It gets its budget from the Federal Reserve and says it can't request money unless the Fed is running a surplus. I'm Nancy Marshall Genser for Marketplace in Los Angeles.

[David Brancaccio]

I'm David Brancaccio, and we're from apm American Public Media. As we head toward the end of the year, Marketplace is here to help you make sense of the economy, what's happening, why it matters, and how it affects you. If this reporting has been valuable to you in 2025, consider becoming a Marketplace investor. Your support powers independent journalism that cuts through the noise and delivers clarity when it counts. Donate [e-mail] don.org or click the link in the show Notes.