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A cooling of the labor marketcharacterized by sluggish recruitment and anemic job creationhas made it difficult for job seekers to find work in 2025, economists say.
“It’s fair to say that 2025 was a hiring recession in the United States,” Heather Long, chief economist at Navy Federal Credit Union, wrote Friday. This recession affects both blue- and white-collar workers, she writes.
U.S. employers added 584,000 jobs last year, according to a Bureau of Labor Statistics report released Friday. This is the worst year for job creation outside of a recession since 2003, according to Long. There have been few job gains since April, meaning most of the gains occurred early in the year, she wrote.
Most hiring has also been concentrated in the health care sector, making it difficult for workers to participate in the broader labor market, economists say.
“Health care alone accounted for about 69% of all job growth in 2025,” Nicole Bachaud, a labor economist at the career site ZipRecruiter, wrote Friday. “Relying on a single industry to maintain positive job growth reveals the shaky foundations at play through 2026.”
Long-term unemployment has also increased. In December, 26% of all unemployed people had been out of work for at least six months, according to the highest share since February 2022, according to the BLS.
This suggests that “unemployment is increasingly becoming a permanent state rather than a temporary transition,” Bachaud said.
On Wednesday, the Bureau of Labor Statistics reported the hiring rate had fallen to 3.2% in November. This is one of the lowest rates since 2013, according to Long.
The job market is expected to remain calm for months
Overall, the current state of the job market shows a clear turnaround from the red-hot market of 2021 and 2022.
At that time, what we call “big resignation” was booming, with job openings at record levels, wage growth at its highest level in decades, and workers able to leave their jobs in droves for better positions.
Economists consider this labor market, in which workers have considerable leverage, to be unsustainable in the long term.
The Federal Reserve has raised interest rates to help calm the labor market and curb inflation, which in 2022 reached its highest level in about four decades.
Additionally, several factors have combined to create an anemic hiring environment, Long wrote: economic policy such as tariffs, business uncertainty, over-hiring in recent years, and a reluctance to hire more workers until the use cases for artificial intelligence become clearer.
Even though the hiring recession is expected to continue in the first half of 2026, the second half is expected to be better for job seekers, due to tax cutslower interest rates and a clearer pricing picture, Long wrote.
How Job Seekers Can Stand Out
According to employment experts, there are ways job seekers can improve their chances of landing a new position, even in a sluggish hiring environment.
1. Highlight your skills and leverage AI to help you
Employers and recruiters have gradually shifted to what’s called “skills-based recruiting,” meaning they prioritize a candidate’s skills and experience over their education level, said Sam DeMase, a career expert at ZipRecruiter.
Data from ZipRecruiter shows that 88% of entry-level jobs omit degree requirements from the job description, and about 70% of recently hired workers have less than a bachelor’s degree, DeMase said.
“Many employers want to hire people who can hit the ground running,” she said.
Job seekers should make sure there is “strong” alignment between the job description and the experience and skills they describe on their resume and cover letter, DeMase said.
This helps candidates stand out to recruiters and get through the automated applicant tracking systems that employers increasingly rely on to sort through applications, she said.
DeMase gave an example of what candidates can write to highlight a value proposition: “Through my experience in
Generic skill statements such as “I have good people skills and attention to detail” won’t work well in 2026, she said.
Priya Rathod, a career expert at job site Indeed, recommends that candidates use artificial intelligence to match keywords in job descriptions with those on their resume. This helps candidates get through the first round of resume screening, she said.
2. Target growing employment sectors
It is important for job seekers to follow employers’ demand, Rathod said.
Workers should target certain areas of the growing job market, including health care, skilled trades, infrastructure and income-critical jobs, particularly in technology, she said.
“To get hired in 2026, you don’t necessarily have to apply everywhere,” Rathod said. “It’s really about aligning your skills and knowing where employers are actually investing.”
For example, a worker with a sales background may not have specific experience selling health care, but they can showcase their sales skills in an app, Rathod said.
Think about transferable skills and work to improve your skills through additional credentials, licenses or certifications to fill gaps, she said.
3. Networking is your friend
Don’t ignore the value of networking, Rathod said.
Whether a person is employed, unemployed or in a part-time position and looking for full-time work, “networking will always be one of your best friends,” she said.
This can take several forms: Engage with industry and community organizationsand talking to friends and colleagues, in person or online, she said.
4. Ignore the “myth” of the one-page resume
DeMase recommends some resume formatting guidelines to further help get through the applicant tracking system’s firewalls.
For example, resumes should be presented in a single-column format with clearly labeled sections, including a title about me, my accomplishments, my work experience, my areas of expertise and my education, if applicable, she said.
Resumes don’t have to be limited to a single page.
“There’s a myth around the one-page resume,” she said. “Don’t sacrifice experience to shorten your resume.”
A resume can be two pages for people with five to 10 years of experience and three pages for those with more than ten years of experience, DeMase said. However, these are not strict rules and may differ depending on the sector of activity.
