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

""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 market, with unemployment peaking at 4.5% in early 2026," JPMorgan said, a week before the Labor Department released the delayed November jobs report."

The labor market cooled amid a volatile year for the economy and financial markets, with job momentum slowing in 2025. Business uncertainty tied to tariffs and trade policies reduced willingness to hire or lay off, keeping planning and payroll changes muted. Stricter immigration enforcement and deportations shrank labor supply while participation remained flat, lowering the monthly job gains needed to hold unemployment steady. Unemployment is expected to rise, peaking in early 2026, with artificial intelligence investment spurring capital spending but not comparable job creation. The labor market is projected to remain slow in early 2026 and then reverse with stronger hiring later in the year.

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