Cooling, Not Crashing: Analyzing the US Labor Market

The US labor market is no longer running hot — but it isn't freezing up, either. In this episode of The Decisive, S&P Global Market Intelligence economist Juan Turcios unpacks what a "softening" labor market really looks like in late 2025 and into 2026, and why the headline numbers don't tell the whole story.

We dig into the sharp slowdown in payroll growth since the post-pandemic boom, the steady rise in the unemployment rate from its 2023 cyclical low, and the increasing concentration of job gains in a handful of sectors — especially healthcare. Juan also explores what's happening beneath the surface: a cooling appetite to hire, fewer workers quitting, and companies trying to get more output from the employees they already have.

Our economist also examines the supply-side forces reshaping the workforce, including slower labor force growth tied to immigration policy shifts and the longer-run drag from an aging population — trends that are changing participation rates and influencing where jobs are being created.

Finally, we look ahead to what this means for productivity, real wages, and the broader US growth outlook, while addressing a critical wild card: growing concerns about the reliability of monthly labor data as survey response rates decline.

Listen now to gain insights that could impact your business decisions and strategy.

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Credits:

• Host: Kristen Hallam
• Guest: Juan Turcios
• Produced By: Debbie Taylor, Kristen Hallam
• Edited By: Marz Marcello
• Published With Assistance From: Sophie Carr, Feranmi Adeoshun