Job Market Confidence Plummets for 2026

Americans are entering 2026 with diminished confidence about the state of the labor market, after months of slow hiring and a tide of layoff announcements brought 2025 to a troubling close.

According to a recent report from the job search platform Monster.com, U.S. workers are preparing for "uncertainty" in 2026, and 40 percent of surveyed employees said they expect the job market to worsen this year, with a further 40 percent anticipating no improvements.

The headline figure marks a significant decline from the results of Monster.com's survey last January, in which 46 percent expected the job market to improve over the course of 2025, while only 34 percent expected it to deteriorate.

Why It Matters

Weakening sentiment about the U.S. labor market, recorded now in a number of surveys, reflects concerns about both job losses and sluggish jobs growth. Successive payroll reports have shown that employers remain cautious on hiring, and unemployment now sits at 4.4 percent according to the latest figures from the Department of Labor, compared to 4.0 percent when Donald Trump returned to office in January.

Against this backdrop, the administration has faced growing scrutiny over its stewardship of the economy and some have warned that, without a major improvement in either economic conditions or messaging, the Republican party could face an electoral reckoning in this year's midterms.

What To Know

According to Monster.com's survey, which gathered responses from 1,504 U.S. workers in mid-December, only 43 percent of workers plan to search for a job in 2026, down from 93 percent in its 2025 WorkWatch report. Researchers took this as a signal that employees are increasingly anxious about their prospects in the current labor market, and are "prioritizing stability and income protection" amid fears over layoffs as well as the implications of artificial intelligence on their careers.

"In 2025, people were willing to test the market, walk away from bad experiences, and bet on change," the report read. "In 2026, workers aren't driven by optimism about what's next, but by realism about what's sustainable."

Over half of those surveyed (52 percent) believe nationwide job cuts will pick up pace in 2026, with 41 percent expecting these to continue at the high rates witnessed in 2025.

In their latest layoffs report, the outplacement firm Challenger, Gray & Christmas found that U.S.-based employers announced 35,553 job cuts in December. While down 50 percent from November's total, the figure represents an 8 percent year-over-year increase, and brought the year's total layoffs to 1.2 million-the highest level since 2020 and the seventh-highest this century.

Meanwhile, 58 percent of those surveyed by Monster.com said their primary concern in 2026 was their salaries failing to keep pace with inflation-now at 2.7 percent, according to the latest government reading-and 57 percent say their current salary has already fallen behind.

What People Are Saying

Monster.com wrote in its report: "Compared to 2025 when workers were reacting to change with cautious optimism, 2026 shows a workforce that has largely accepted uncertainty as a constant. Rather than accelerating career moves, workers are prioritizing stability and income protection and are quietly adapting through side hustles, upskilling, and more selective job searching. This shift isn't about disengagement; it's about preservation and planning."

Aaron Sojourner, senior researcher at the W.E. Upjohn Institute for Employment Research, previously told Newsweek: "Every sector is at risk for layoffs in 2026. Unemployment is rising and job growth is slowing broadly across sectors. Wage growth has decelerated versus a year ago.

"Employer labor demand is weakening due to a combination of policy and economic uncertainty, higher taxes on imported inputs, withdrawal of public investments in health care, in medical and scientific innovation, and in the loss of immigrant consumers," he said, adding that artificial intelligence could also weigh on both hiring and firing in 2026.

What Happens Next

Looking at longer-term corrosives for the U.S. workforce, almost half (49 percent) of those surveyed by Monster.com said they feared AI threatening to replace those in their role or industry.

Newsweek

This story was originally published January 14, 2026 at 12:42 PM.