Despite the considerable fluctuations experienced in 2025, outcomes have been rather favorable: The S&P 500 has seen an increase exceeding 17%, inflation has not surged notwithstanding a barrage of tariffs, and the jobless rate has remained quite stable.
Forecasters and shareholders are largely optimistic regarding 2026, given that the American economy's output has surpassed projections since the pandemic concluded, prompting a favorable outlook amidst substantial government spending.
However, beneath the generally strong economic outlook, signs of strain are emerging. These disturbances are already apparent; one need only examine the Fed’s decision to cut the base rate yesterday even though it's argued that, under typical conditions, there'd be no specific justification for it. Markets expected the cut based on the labor outlook, which is exhibiting some indications of faltering in what Fed Chair Jerome Powell has termed a “low-hire, low-fire” economy.
TL;DR
- S&P 500 increased over 17% in 2025; inflation stable despite tariffs; jobless rate steady.
- Forecasters optimistic for 2026 due to strong economic output and government spending.
- ADP economist Nela Richardson notes emerging signs of strain, especially in small businesses.
- Job market dynamics are rapidly changing, making it difficult for new entrants.
This vulnerability appears poised to become something of a fixture in 2026, as stated by Nela Richardson, ADP's chief economist. ADP's perspective on the economic landscape has gained importance throughout this year, partly due to the federal government's closure, which resulted in the non-publication of official employment figures. In the absence of this information, data from ADP emerged, providing private sector employment statistics.
Contrary to her economist colleagues on Wall Street, Richardson informs Coins2Day: "We're monitoring shifts instantaneously—it's as high-frequency as employment figures can become, and we haven't observed this optimistic outlook for 2026 within the figures. I believe when individuals refer to a better job market in the coming year, they're emphasizing certain aspects of the broader economy, whereas we're examining this highly detailed set of private job data.
“They’re highlighting maybe a couple of rate cuts; they’re highlighting some tax advantages on the fiscal side; and they’re probably highlighting some AI and investment paying off—and certainly they’re probably adding some clarity in terms of trade policy and resolving some of the macro [questions]. All fantastic attributes, but it takes longer for those to trickle to mom and pop.”
Richardson highlights the latest jobs reporting from her firm: American private sector jobs decreased by 32,000 positions in November, primarily due to a downturn in smaller enterprises. Businesses employing one to 19 individuals eliminated 46,000 positions, and those with 20 to 49 employees reduced their workforce by 74,000. In contrast, firms with over 500 personnel gained 39,000 workers.
“Tiny firms are a big chunk of employment, but the tiny firms are making tiny moves, and they’re moving all in the same direction,” Richardson added. “It could be as small as not hiring two teenagers at the bakery or forgoing that delivery driver over a certain season, it doesn’t mean it’s a big, huge layoff, it’s not replacing a worker here or there, and those changes add up.
“If you’re making those micro moves, micro decisions for mom-and-pop [businesses], these macro drivers are less likely to influence your patterns.”
A rapidly evolving picture
Once upon a time, a sound work ethic and perseverance were enough to get you a foot on the career ladder. In 2025, that’s no longer the case—just ask the business leaders at the top of some of America’s largest corporations.
While it's accurate that Gen Z is encountering a job landscape vastly different from their parents', the dynamics of participation are changing so swiftly that individuals entering the workforce year after year confront a new set of challenges, thereby intensifying the outlook for 2026.
Richardson states these changes didn't occur in isolation but rather represent the peak of developments over the last half-decade. Key among these are the phenomenon known as the Great Resignation and the growth of flexible work arrangements. For instance, with hybrid work models, the pool of potential candidates has grown significantly, as recruiters are no longer limited by geographical boundaries.
Likewise, “the Great Resignation meant people were able to demand their own terms,” Richardson added. “That meant hybrid work, that meant higher salaries and bonuses, all kinds of promotions happened during that time. Why leave?”
These factors mean the goalposts are constantly changing for market entrants: “It’s not even generation to generation,” Richardson says. “It’s your older brother and sister who graduated three or four years ago, it’s not even their job market anymore.”
