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Cracks Emerge: US Economy's Bright 2026 Outlook Fades
11 Dec
Summary
- US private employment fell by 32,000 roles in November.
- Small businesses cut jobs while large corporations added them.
- Economic shifts driven by Great Resignation and hybrid work.
While the US economy has shown resilience through 2025 with a strong S&P 500 and stable inflation, emerging data signals potential weakness ahead for 2026. Private payroll figures indicate a divergence, with companies employing over 500 individuals adding staff, while smaller businesses, particularly those with fewer than 19 employees, have significantly reduced their workforces. This trend suggests that widespread economic improvements are not yet trickling down to the smallest businesses.
ADP's chief economist, Dr. Nela Richardson, highlights that real-time, high-frequency private payroll data presents a less rosy picture than broader macroeconomic indicators might suggest. While factors like potential interest rate cuts and fiscal stimulus are noted, their impact on 'mom and pop' businesses is delayed. The recent drop of 32,000 private sector roles in November underscores this disparity, with smaller firms making cautious decisions that collectively impact employment.
These employment shifts are part of larger, evolving trends over the past five years, including the 'Great Resignation' and the widespread adoption of hybrid work. These phenomena have fundamentally altered the job market, making it more competitive and dynamic. Consequently, the landscape for new job seekers is rapidly changing, with even recent graduates facing a different set of challenges compared to their predecessors.
