- Economists talked to Business Insider about what they expect to happen in the job market this year.
- Getting a white-collar job could still be hard, and more people may have to return to the office.
- Changes under a new administration could affect hiring and turnover.
Getting a job was tough for many Americans in 2024. If a career shift is your New Year’s resolution for 2025, you might still find it challenging.
Job growth has slowed, unemployment has been historically low but rising, and unemployed Americans are staying jobless for longer.
“Heading into 2025, it is going to be a little harder for job seekers across the board,” Cory Stahle, an economist at the Indeed Hiring Lab, said in December. “We’ve seen that just about every category on Indeed has come down year over year in terms of the number of job postings. So that suggests that employer demand has cooled.”
Nela Richardson, ADP’s chief economist, described the labor market in 2024 as unusually stable and quiet. She pointed to steadily low layoffs and a drop in voluntary turnover amid cooler hiring.
“The stasis is rather abnormal, and I think it’s going to make it tough for workers who are looking for new opportunities to find them,” Richardson said.
Here’s what economists expect when it comes to finding a job, wages and promotions, and other aspects of work life in 2025.
A new administration could bring uncertainty
One reason it’s still going to be hard for job searchers to land a job is employers may want to see what policies President-elect Donald Trump pursues early in his second term.
“While business sentiment has picked up somewhat since the election, there is still a lot of uncertainty about future policy changes that will likely make businesses hesitant to ramp up hiring, particularly in the first half of 2025,” Dante DeAntonio, a labor economist with Moody’s Analytics, said in a written statement.
A potential crackdown on immigration could affect industries with a higher share of immigrant workers, like the construction sector. DeAntonio said those industries “may find themselves scrambling for workers if material changes to immigration policy are enacted.” DeAntonio noted the leisure and hospitality industry and agriculture as two others that have historically depended on immigrant labor and could be affected by changes.
The new administration could also affect government workers and job seekers. Trump’s Department of Government Efficiency, led by Elon Musk and Vivek Ramaswamy, is figuring out suggestions for cutting federal spending and regulations.
“A drastic reduction in federal regulations provides sound industrial logic for mass head-count reductions across the federal bureaucracy,” Musk and Ramaswamy wrote in an op-ed published by The Wall Street Journal.
Employment growth in the federal government has cooled down. Between November 2022 and November 2023, the federal government added 77,000 jobs but just 49,000 the following year.
“Depending on how things go with the new administration, we may see a lot of government workers either losing their jobs or quitting,” Brian Rose, senior US economist for UBS’s chief investment office, said. “This could be an opportunity for private sector companies to pick up some skilled workers.”
Getting a job in a white-collar industry may still be a challenge
Richardson said white-collar job seekers, like those searching for tech roles, should be ready to network and for it to take more time to get a job.
“It’s not that these jobs don’t exist, and it’s not that there’s not opportunities out there, but the opportunities that people had gotten used to prior to 2024 have slowed,” Richardson said. “This economy coming out of the pandemic really thrived on tech jobs.”
DeAntonio said white-collar industries “are likely to remain at the top of the list as difficult for job seekers to enter as those firms have been some of the most cautious in terms of hiring.”
Stahle said there are still a lot of jobs available in construction and manufacturing, even if opportunities have slowed from a year or two ago. However, Stahle said software development, marketing, and other knowledge-work jobs “have been hit much harder” by the job market slowdown.
“I think it’s going to continue to be kind of a divergence in the labor market where some job seekers will have an easy time next year, albeit a little harder than last year, and then some are going to have a harder time than they’ve had in a few years,” Stahle said in a 2024 interview.
Healthcare, manufacturing, and construction will probably be good places to look for work
Rose said the difficulty of landing work depends on someone’s job experience and field of work. While hiring might continue to be rough in finance and tech, construction is one industry that needs workers.
Rose said construction and skilled workers for smaller companies are in high demand. He also thinks lower-paying jobs are in demand.
“If you’re in healthcare or the skilled trades, you’re in the right place,” Julia Pollak, chief economist at ZipRecruiter, said. “If you’re anywhere else, you might want to reevaluate your career choices and look into re-skilling and broadening your search.”
Healthcare has had large job growth relative to other industries and has largely maintained its growth rate even as broader hiring has slowed.
Richardson sees a hopeful outlook for the interest-rate-sensitive manufacturing sector as the Federal Reserve has cut rates in its last few meetings.
“As we’re seeing the Fed continue to try to draw down rates, manufacturing might benefit from that, and new sources of technology and tech advancement, that leads to more hiring in the sector,” Richardson said.
More workers might have to head back to the office
AT&T said in December that it wants its office workers fully back to the workplace. Amazon also told employees they need to fully work from the office, but it has delayed the January 2 deadline for some.
“We are likely to see a continuation of the mixed bag of workplace policy changes that occurred this year,” DeAntonio said. “Some firms will undoubtedly make a stronger return to office push, especially now as workers seem less inclined to switch jobs as they have in recent years.”
Despite those moves, the share of white-collar employees working outside the office has risen. Bureau of Labor Statistics data showed that 46% of management, business, and financial operations occupations worked remotely at least part of the time in November 2024, up from 41% a year prior.
Real wage growth could be strong this year
Stahle said the “outlook for raises and compensation is promising.” However, he also said, “we don’t want to see wages necessarily pick up to a point where they could fuel inflation.”
Stahle said hiring needs to pick up, particularly for roles that haven’t had robust growth, to have a soft landing, where inflation slows to the Fed’s 2% target while unemployment and layoffs stay steady.
“We want to see people continuing to have decent wage growth, especially wage growth that keeps their purchasing power up and above inflation,” Stahle said.
The year-over-year increase in average hourly earnings was 4% in November, down from the growth rate in 2022 and the roughly 4.4% increase at the start of the year, although it’s outpaced cooling inflation since mid-2023. Rose thinks wage growth will likely moderate further.
“There’s just better balance in the labor market, so less need for companies to raise their wages to attract workers,” Rose said about the current slowdown.
However, DeAntonio said if immigration policy changes occur, the labor market may become even tighter, “which will increase leverage for employees in seeking bigger pay increases.”
The job market may be unfavorable for new college graduates
Stahle said the job market could be challenging for young people. The unemployment rate for recent college graduates aged 22 to 27 has been ticking up, but it falls short of the rate for those without a degree in this age group.
Rose thinks “recent college grads who went to some private college and spent a lot of money and looking for a high-paying, entry-level job to justify that investment” are having a tough time in the job market.
Are you worried about the job market in 2025, making a career change, or have an interesting career story to tell? Reach out to this reporter at mhoff@businessinsider.com.
