The job market in 2026 will suffer from ‘uncomfortably slow growth’ in the first half but reverse higher later in the year, JPMorgan says

The labor market cooled during a rollercoaster year for the economy and financial markets, and 2026 should start off slow but then improve later in the year, according to JPMorgan.

In a forecast published earlier this month, economists at the bank attributed 2025’s loss of jobs momentum to business uncertainty created by President Donald Trump’s tariffs and trade policies.

“As a result both long-term and short-term business planning has remained difficult, and layoff and hiring rates have been low,” Michael Feroli, chief U.S. economist at JPMorgan, said in the report. “Businesses are hesitant to make sweeping changes to either grow or shrink their payrolls when they’re unsure what the next six months might hold.”

In addition, Trump’s immigration crackdown and deportation campaign have been more aggressive than expected, JPMorgan added.

This reduced supply of workers plus the relatively flat labor participation rate flat mean that the monthly job gains needed to keep unemployment steady could tumble to just 15,000 from 50,000. Despite the lower breakeven rate, unemployment will creep higher.

“The first half of 2026 will likely deliver uncomfortably slow growth in the labor ma...