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A cooling labor market, characterised by sluggish hiring and anemic job creation, made it onerous for job seekers to seek out work in 2025, in response to economists.
“It is truthful to say that 2025 was a hiring recession in the US,” Heather Lengthy, chief economist at Navy Federal Credit score Union, wrote in a observe Friday. That recession impacts each blue- and white-collar employees, she wrote.
U.S. employers added 584,000 jobs final 12 months, in response to a Bureau of Labor Statistics report issued Friday. That marks the worst 12 months for whole job positive factors outdoors of a recession since 2003, in response to Lengthy. There was little job creation since April, that means most positive factors happened early within the 12 months, she wrote.
Most hiring has additionally been concentrated within the health-care sector, making it troublesome for employees to take part throughout the broad labor market, economists stated.
“Healthcare alone accounted for roughly 69% of all job progress throughout 2025,” Nicole Bachaud, a labor economist at profession web site ZipRecruiter, wrote in a observe Friday. “The reliance on a single business to maintain job progress constructive uncovers the unstable basis in play going into 2026.”
Lengthy-term unemployment has additionally climbed. In December, 26% of all unemployed employees had been out of labor for at the least six months, the highest share since February 2022, in response to the BLS.
That means “unemployment is more and more turning into a everlasting state reasonably than a short lived transition,” Bachaud stated.
On Wednesday, the Bureau of Labor Statistics reported the hiring fee had fallen to 3.2% in November. That is one of many lowest charges since 2013, in response to Lengthy.
Job market prone to stay cool for months
General, the present state of the labor market reveals a stark turnaround from the scorching market of 2021 and 2022.
At the moment, the so-called “great resignation” was in full swing, with job openings at report highs, pay progress at its highest in a long time and employees in a position to go away their jobs in droves for higher positions.
Economists known as that labor market, through which employees loved appreciable leverage, unsustainable over the long term.
The Federal Reserve raised rates of interest to assist cool the labor market and rein in inflation, which in 2022 hit its highest degree in about 4 a long time.
Moreover, a number of elements coalesced into an anemic hiring setting, Lengthy wrote: financial coverage reminiscent of tariffs, enterprise uncertainty, over-hiring in recent times, and a reluctance to rent extra employees till the use instances for synthetic intelligence develop into clearer.
Whereas the hiring recession will doubtless proceed within the first half of 2026, the second half needs to be higher for job seekers, attributable to tax cuts, decrease rates of interest and a clearer tariff image, Lengthy wrote.
How job seekers can stand out
There are methods for job seekers to enhance their possibilities at touchdown a brand new place, even in a lackluster hiring setting, in response to job specialists.
1. Spotlight your expertise — and leverage AI to assist
Employers and recruiters have steadily shifted to so-called “skills-based hiring,” that means they prioritize a candidate’s expertise and expertise reasonably than instructional attainment, stated Sam DeMase, a profession skilled at ZipRecruiter.
ZipRecruiter information reveals 88% of entry-level jobs omit diploma necessities within the job description, and about 70% of lately employed employees have lower than a bachelor’s diploma, stated DeMase.
“Many employers wish to rent people who can hit the bottom working instantly,” she stated.
Job seekers ought to guarantee there’s “robust” alignment between the job description and the expertise and ability units they define on their resumes and canopy letters, DeMase stated.
This helps candidates stand out with recruiters and make it by means of the automated applicant monitoring methods on which employers more and more rely to type purposes, she stated.
DeMase gave an instance of what candidates can write to spotlight worth proposition: “Utilizing my background in X, I helped corporations obtain Y.” For instance: “Utilizing my background in digital advertising and intensive background in information evaluation and content material planning, I helped corporations craft revolutionary campaigns that entice and delight the best viewers and drive income.”
Generic expertise statements like “I’ve good individuals expertise and a focus to element” will not work properly in 2026, she stated.
Priya Rathod, a profession skilled at job web site Certainly, recommends that candidates use synthetic intelligence to match key phrases in job descriptions with these of their resume. This helps candidates get by means of the primary spherical of resume screening, she stated.
2. Goal job sectors which might be rising
It is vital for job seekers to observe employer demand, stated Rathod.
Employees ought to goal sure areas of the job market which might be rising, together with well being care, expert trades, infrastructure and revenue-critical jobs, particularly inside know-how, she stated.
“Getting employed in 2026 is not essentially about making use of in every single place,” Rathod stated. “It is actually about aligning your expertise and the place employers are literally investing.”
For instance, a employee with a gross sales background could not have particular expertise in health-care gross sales, however they will play up their gross sales expertise in an utility, Rathod stated.
Take into consideration transferable expertise, and work to upskill through further credentials, licenses or certifications to fill in any gaps, she stated.
3. Networking is your buddy
Do not ignore the worth of networking, Rathod stated.
Whether or not an individual has a job, is unemployed, or has a part-time position and is searching for full-time work, “networking is at all times going to be one in all your finest mates,” she stated.
This could take a number of types: Engaging with industry and community organizations, and speaking to mates and colleagues, both in particular person or on-line, she stated.
4. Ignore the one-page resume ‘delusion’
DeMase recommends sure nuts-and-bolts resume formatting pointers to additional assist make it by means of applicant monitoring system firewalls.
As an illustration, resumes needs to be in a single-column format with clearly labeled sections, together with a headline, about me, achievements, work expertise, areas of experience and schooling, if relevant, she stated.
Resumes do not must be restricted to 1 web page.
“There is a delusion in regards to the one-page resume,” she stated. “Do not sacrifice expertise to shorten your resume.”
A resume might be two pages for individuals with 5 to 10 years of expertise, and three pages for these with greater than 10 years of expertise, DeMase stated. These aren’t onerous and quick guidelines, nonetheless, and will differ primarily based on business.
