Job Postings By Industry

Breaking it Down Further

Consumer moods and spending habits reveal slightly different signals. Sentiment indices from both the Conference Board and the University of Michigan declined through the fourth quarter, with December confidence levels significantly below those of late 2024, as households expressed concerns about prices, politics, and job security. However, actual spending data did not show a decline. Advance estimates indicate that retail trade and food services sales in November (the most recent data available) were about 3.3% higher than a year earlier. This creates a familiar disconnect: although consumers feel pressured, overall spending has stayed resilient so far.

This divergence between sentiment and behavior likely reflects the labor market’s shifting composition. While the headline unemployment rate has moved only gradually, the number of people unemployed 27 weeks or longer has climbed over the past year, and long-term joblessness now accounts for roughly one-quarter of all unemployment, its highest share since early 2022. Combined with the recent rise in the U-6 measure and steady average weekly hours, this points to a rise in chronic unemployment and underemployment beneath the surface of an otherwise stable jobless rate. That dynamic helps explain why confidence has weakened.

The Federal Reserve has responded to the cooler economic environment. After maintaining restrictive rates for most of the year, it implemented three quarter-point cuts in 2025—during September, October, and December—reducing the federal funds rate target to 3.75%. Policymakers describe these as modest insurance cuts rather than a shift to aggressive easing, citing inflation still above the 2% target and a moderately expanding economy. In effect, borrowing costs remain considerably higher than before the pre-pandemic era, which continues to weigh on interest-sensitive spending even as it offers some support to the labor market.

Industry data indicate a reallocation in the labor market rather than a straightforward decline. In the fourth quarter, payroll employment increased in Private Education & Health Services by 141,000 jobs and in Leisure & Hospitality by 77,000 jobs, despite online job postings in these sectors decreasing or dropping. At the same time, Trade, Transportation, and Utilities saw both payroll employment and advertised vacancies fall sharply, signaling genuine cooling rather than simple hiring-process normalization. Employers in health care, education, and many service industries appear to be drawing down earlier postings and hiring from existing connections, whereas firms in trade- and logistics-related activities are pulling back on both current employment levels and recruitment. 

Analyzing the stock-up and stock-down patterns in employment and postings reveals a labor market that is tightening in specific areas. For example, sectors such as Leisure & Hospitality and Other Services show falling postings but still see slight increases in staff numbers. This suggests these sectors are normalizing after a swift post-pandemic rebound, with employers becoming more selective and reducing their reliance on continuous advertising. In contrast, industries such as Government and Trade, Transportation & Utilities, where payrolls are contracting, and postings are also down, face a more fundamental adjustment driven by policy changes, cost pressures, and evolving demand. The imbalance between still-solid consumer outlays in retail and food services and weaker confidence, alongside rising long-term unemployment and a cautiously easing Fed, supports the view that the labor market is transitioning into a slower, more discriminating phase.   

The BLS enters 2026 without a permanent replacement for its previous director, who was dismissed at the beginning of August. The Current Employment Statistics Survey has been facing chronic problems with overestimating employment in its initial estimates, which require significant write-downs in subsequent months. The problem appears to stem from low response rates by employers and seasonal adjustment factors that may have been distorted by the pandemic. The appointment of a new director might give us a clue on what steps the BLS will take to improve their data collection and refining so the advanced estimates more accurately match the final revisions. More reforms could be on the table as well. Labor market watchers will be paying close attention.