Research & Data
U.S. job growth in 2026 has become broader than last year’s health-care-driven gains, but economists at the Federal Reserve Bank of Atlanta say that is not the same as a decisive turnaround. Two pieces the bank published this week, an Oct. 13 industry analysis and an Oct. 15 article drawing on its labor economists, reach the same verdict: the job market has stabilized and modestly improved, but low hiring, few quits and little job switching are holding it back.
Both analyses describe the national labor market. Although they come from the Atlanta Fed, they are not measures of jobs in metro Atlanta or Georgia.
Gains are no longer just health care
In the Oct. 13 Macroblog post, research economist Lei Fang found that payroll employment grew by an average of 68,000 jobs a month over the first nine months of 2026, after averaging just 10,000 a month in 2025. Last year, employment outside health care fell by roughly 23,000 jobs a month on average.
This year, 10 of 13 major sectors added jobs on average through September. Only government, information and financial activities declined. Health care was still the largest contributor at about 28,700 jobs a month, but its share of total gains fell to about 42%. Information fared worst, with employment down 3.6% from December 2025 to September 2026.
Labor demand improved too, but only a little. The job-opening rate, measured as a three-month average, rose from 4.13% in December 2025 to 4.33% in August 2026, with increases in eight of 12 industries. That remains well below the 2024 average of 4.70%. The number of vacancies per unemployed worker edged up from 0.93 to 0.98 between August 2025 and August 2026, which Fang described as little overall change in labor market tightness. Her conclusion: the labor market has strengthened since late 2025, “but only modestly.”
Why economists are not calling a turnaround
The Oct. 15 article, written by the Atlanta Fed’s Charles Davidson, lays out the case on both sides. Monthly job growth averaged 87,000 from March through September after cumulative job losses over the previous six months, the unemployment rate has stayed below 4.5% since last November, and more than half of 250 private-sector industries added jobs in eight of the first nine months of 2026, according to the BLS diffusion index.
The other side: that pace is about a quarter of the 2021-2024 monthly average, and the bank’s business contacts almost unanimously report plans for little hiring the rest of this year. Workers are quitting at the lowest rates since 2015, outside the pandemic months, and the hiring rate is similarly subdued. Atlanta Fed economist Paul Mohnen calls the shift a move from the “Great Resignation” to the “Great Stay.”
Research economist Julie Hotchkiss said the likeliest diagnosis is a labor market in a holding pattern, stable but not roaring. Vice president and senior economist Jon Willis put it more bluntly: “Have we turned a real corner? Not really.”
Why it matters for job seekers
Low churn makes job searches harder. Mohnen noted that about half of all job openings are created when someone leaves a position, so when workers stay put, fewer jobs open up. He pointed to lengthening unemployment spells and rising unemployment among recent college graduates as signs of that strain, and wrote that “lower churn puts downward pressure on wage growth and productivity.”
Fang’s industry data suggest where to look: gains are broader than last year, so sectors beyond health care are adding workers again, while information, financial activities and government have lost jobs on average this year.
The catch
Monthly payroll figures are noisy and get revised. The Oct. 15 article notes that the Bureau of Labor Statistics’ 90% confidence range for the initial August estimate ran from 37,900 to 284,300 jobs. A couple of strong months, Mohnen said, is not enough to declare a turnaround.
Sources
- Federal Reserve Bank of Atlanta, “Does Improved Jobs Growth Signal a Labor Market Turnaround? It’s Complicated.” October 15, 2026. https://www.atlantafed.org/what-we-study/employment/2026/10/15/does-improved-jobs-growth-signal-labor-market-turnaround-its-complicated
- Federal Reserve Bank of Atlanta, “Beyond Health Care: Has Labor Market Improvement Broadened in 2026?” October 13, 2026. https://www.atlantafed.org/research-and-data/publications/policy-hub-macroblog/2026/10/13/beyond-health-care-has-labor-market-improvement-broadened-in-2026
Featured photo: The Federal Reserve Bank of Atlanta building in Atlanta, photographed in September 2023. Photo: Thomson200, via Wikimedia Commons (CC0). Cropped from the original.
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