56,740 layoffs are now confirmed for quarter 1. Associates degree holders are failing to outearn high school graduates. 15 million working age Americans are not gainfully employed going into the new year. And we’re entering the weakest hiring projections in half a decade. This is the 2026 job market forecast. In 2025, 1.17 million Americans lost their jobs to layoffs. And unfortunately, that trend isn’t letting up going into 2026.
By federal law, most companies have to give at least 60 days notice before laying off their staff. And those notices are compiled into WARN Act reports, which allow us to see what companies in what states are laying off how many workers. As of right now, we’re looking at 56,740 confirmed layoffs going into the first quarter of the year. Layoffs that are mostly being driven by corporate restructuring, the financing of AI, and a weird uptick in companies abusing the H-1B worker system.
This isn’t just a temporary downturn. This is a fundamental shift in how the job market functions. The numbers tell a story of an economy in transition, where traditional employment patterns are breaking down, where education investments aren’t paying off as expected, and where millions of Americans are falling through the cracks of official unemployment statistics. The 2026 job market forecast reveals a reality that’s far more complex and far more challenging than the official unemployment rate suggests.
The Layoff Crisis: 56,740 Confirmed and Counting
Restructuring base layoffs in 2025 were mostly driven by the slashing of federal grants and by acquisition induced bloat reduction. So, what does that mean in English? Here in the US, we have a bad habit of creating what are called diamond-shaped companies, where you have a small handful of people at the top making actual decisions, a small handful of people at the bottom doing the actual work, and then a ton of coordinators in the middle who get paid 100k a year to cut breakroom donuts into fifths and to doomscroll on LinkedIn. So once that company gets bought by a different company, the new company goes, “Oh my god, you guys spent millions of dollars a year on the salaries of people who aren’t really productive.” So those people get laid off, creating what a lot of news outlets called the middle management purge in 2025.
But another major source of restructuring came from just how many federal contracts were slashed by the government this last year. It’s difficult to say just how much money was removed from the contract pool because admittedly a lot of political controversy surrounds this topic. You had Doge claiming 55 billion while other fact checkers claimed that it was somewhere in the single digits. But regardless of the true amount, what we do know is that billions of dollars that normally funded researchers, analysts, and engineers at private companies outside of the federal government went away, causing those companies to lay off those workers instead of funding the salaries themselves.
The second big driver of layoffs is, of course, the financing of AI. Companies are dumping trillions of dollars into AI programs right now, which unfortunately haven’t led to any real return on investment, unless you happen to make chips or data centers. And this puts us in a bit of a lose-lose situation with the job market going into 2026. If companies keep funneling more money into AI, then they’re going to keep laying off workers in order to afford to do so. But if companies don’t keep funneling money into AI and the bubble bursts, then the United States might experience one of the worst recessions in its history, which again will just lead to a bunch of layoffs. I would not be surprised if either of those two scenarios plays out going into 2026.
But one thing I do want to draw your attention to, however, is just how many major tech companies are still replacing their American staff with H-1B workers despite the federal government trying to crack down on this. If you don’t know, an H-1B worker is a non-American, typically with a college degree, who comes to the United States in order to fill a skills gap at a company. In theory, this system makes a lot of sense and is a really effective way to bring high quality workers from other countries into the United States. In practice though, look, I’m not going to make any accusations here, but I do think it’s just a little suspicious that Amazon claimed they needed to lay off 30,000 American workers this year only to then get approved to hire 40,000 H1B workers. But like I said, I’m not accusing them of anything, and the federal government is trying to crack down on this. So, I imagine that this will be a pretty big conversation around labor going into 2026.
The Hidden Unemployment Crisis: 14.8 Million Americans Not Counted
But regardless of your personal feelings around that, one thing that we all can’t afford to ignore is the fact that there are now 14.8 million working age Americans who are not gainfully employed going into the new year. As of this month, the U6 unemployment measure in the US when seasonally adjusted is 8.7%. And if you’re thinking, “Hey, wait a minute. That’s double the official unemployment rate being touted by news outlets and government agencies,” then you’d be on to something. The official unemployment rate in the US is now sitting at 4.6%. Up only 2 percentage points over 2025, despite over a million Americans getting laid off and not necessarily landing on their feet.
See, the problem with the official unemployment rate in the US, also known as the U3 measure, is that it stops counting people who continue to be unemployed for more than 4 weeks. It stops counting people who take on temporary or gig work in order to pay the bills, and it stops counting people who have given up entirely. So, if you get laid off from your job and it takes you more than 28 days to find a new job, then the federal government just magically doesn’t consider you unemployed anymore and instead labels you as marginally attached. If you get laid off and then immediately start mowing lawns in your neighborhood in order to pay for next week’s groceries, even if that isn’t enough at all for you to live off of, then you are no longer considered unemployed either because you’re technically making money. And if you get laid off and decide to start playing Fortnite in your mother’s basement instead of looking for a job, then the federal government labels you as discouraged and you magically no longer count as being unemployed either.
Instead of being counted in the official unemployment rate, marginally attached and discouraged workers count as part of the U6 unemployment measure, which is currently sitting at 8.75% of the civilian labor force, totaling 14.8 million people. As a job market analyst, that is a scary number because that means that one in every 11 working age Americans is in theory somebody who wants to be employed full-time but is either being supported by their loved ones after a layoff or is living off government employment benefits or is trapped in part-time work that isn’t sustainable over the long term or is competing against young adults for entry-level jobs in order to temporarily get by robbing those young people of the chance to boost their resumes and propel their own careers.
The Education Investment Crisis: When Degrees Don’t Pay
According to the First Destination survey of over 360 colleges in America, last year’s graduating class started out earning an average salary of $66,000 a year, sitting just above the median full-time salary for the country as a whole. Now, this 66k number is technically up from the 54,000 we saw amongst recent college grads back in 2019 before co. But considering that inflation has increased by 26.7% in that same time, and considering that 66 is only 20% higher than 54, that means that today’s college graduates are technically earning less money in terms of buying power than they were back in 2019. And when you couple that with bleak entry-level hiring projections, things aren’t really looking good for college grads.
But that doesn’t mean non-college graduates are doing any better. They aren’t. And I don’t want to paint education with a broad brush. What you study and what level of higher education you attain makes a massive difference in what you’ll make over the course of your life. So, while you do have bachelor’s degree holders earning 66 across the board, you have master’s graduates averaging 82,000, PhD graduates averaging 104, and then unfortunately, you have associates degree holders averaging $42,000 in starting salary across the United States, which functionally is not any better than high school graduates who didn’t go to college at all. A very sad reality that we are facing in this country is that associates degrees are not reliably earning people more money than they would have made if they just went straight into the professional workforce out of high school.
Now that doesn’t mean that these degrees are worthless by any means. The benefits and the standard of living that you would get as say a phabotamist might be a lot higher than you would get working at a call center even if the salaries are exactly the same. But it does beg the question of how much money students are being asked to spend on certain programs when the financial return on investment just isn’t there. If someone studying to become a CNA where they’ll make $48,000 a year, then there’s an argument to be made that they shouldn’t be paying the same tuition as someone studying to become an aerospace engineer.
The Student Debt Reality: What the Numbers Actually Show
It seems like everywhere you look, there’s some podcaster or guru ranting about Americans with $100,000 in debt for degrees that they aren’t even using. But what are the real numbers? Well, according to the Federal Reserve, which reports on over 90% of all student loans, the median student debt burden in this country is sitting somewhere between 20 and $25,000. meaning half of Americans have more than that and half of them have less. And then when tallied out, the Education Data Initiative lists the average student debt across the board in this country as $39,000, which it’s important to bring up is being heavily skewed upward by Ivy League attendees and people doing things like getting PhDs to become a doctor or lawyer. you can very safely assume that a normal American who went to college likely has student loan debt somewhere in the lower 20,000s.
And while I know that this is supposed to be a more objective video about where things are at, I can’t help but point out that that’s not that bad. It’s certainly worse than Europeans who are graduating with no student debt at all. Like, don’t get me wrong. But when you consider that the average American takes out $26,000 in debt for used cars and has $7,000 in unpaid credit card bills with insane interest rates, it just strikes me as silly that we would vilify a type of debt that so obviously leads to a positive return on investment, especially when getting a bachelor’s degree will on average double your earning potential compared to someone who doesn’t go to college at all. And sure, you can earn more than somebody with a degree, even if you don’t go to college, but that salary overlap across the entire population is incredibly small.
So, I believe that it is both irresponsible and quite frankly wrong to suggest that college going is bad for society as a whole in terms of debt or salary outcomes. So, I’ll just say this. If somebody in power, especially if they’re a politician, a CEO, or an influencer, tries to tell you that college is a waste of time and money, then it’s my opinion that they are lying to you on purpose. most likely to either keep you uninformed so that you vote against your own best interests, to trick you into buying their alternative education courses online, or to decrease competition so that their kids can stay rich while yours stay poor. These people aren’t stupid. They have the exact same data that you and I do, and they know that education pays off. It’s the same reason why they send their kids to Ivy League schools while at the same time going on to podcasts to tell people that college is a scam. They don’t want you to compete with them.
Where the Jobs Actually Are: Industries Hiring and Firing
This past quarter, the biggest increases in jobs were in private education, health care, and private services providing, so like consultants and lawyers. While the biggest losses were seen in warehousing, car manufacturing, retail trade, and the government. Now, the last two are obviously temporary because of Doge and tariffs. So, I also like to look at unemployment rate by industry. Over this past year, people working in agriculture, oil and gas, hospitality, retail, and information systems had the highest rates of unemployment in the country. While people working in durable goods manufacturing, finance, education, and healthcare, and ironically enough, the government had the lowest rates of unemployment in the country. Which is all to say that this stuff is nuanced. Crazy, I know.
The job market isn’t uniformly bad or uniformly good. It’s a patchwork of opportunities and challenges. Some industries are thriving. Others are struggling. Some degrees pay off handsomely. Others don’t. Some workers are in high demand. Others are being replaced. The key is understanding where the opportunities actually are and positioning yourself to meet them where they’re at.
Hiring vs. Firing: Is Your Industry Safe?
While warehousing and retail shrink, healthcare, education, and finance are booming. The job market is a patchwork of risks and opportunities. Don’t guess—position yourself in a sector with structural growth.
Find Growing Industries →Meeting Opportunities Where They Are: A Practical Approach
So, at the end of the day, regardless of what it is that you want to do, the best way to land your dream career is to simply meet those opportunities where they are at. Let’s say that you want to work with LAR drones because you’re, you know, a dork. I want you to look at hundreds of job descriptions today of openings for people to work with drones and then ask yourself, what education, skills, and experiences are they asking for? What you’ll find is that LAR drones are typically used by engineers, the Forest Service, land surveyors, and factory farms. Okay, so let’s say that out of all of those, becoming an engineer is what sounds best to you. Next, we need to figure out what type of engineer you have to become. In this case, you’ll realize that you’re most likely going to need to become a civil engineer with some type of emphasis in geomatics, GIS, or surveying. Great. which colleges in your state offer those programs and those emphases. Let’s say that you take a look and that you narrow it down to two schools. From there, you’ll want to figure out which of those two schools has the best experiential learning opportunities, internships, and access to professional organizations like the ASCE. And if your school publicly lists this data, then you’ll also want to go through their first destinations report to see how many civil engineering students actually graduated with a full-time job offer, where they went, and what they’re making.
An optional yet less elegant approach to this would also be to go through your school’s alumni tab on LinkedIn and then filter for civil engineers over the past 5 years. And if you do your research due diligence and you find that both schools are equally good in terms of access to opportunities, then it’s time to move into more superficial concerns. Which campus do you like more? Does one have a better college life scene than the other? Is one rural while the other is urban? Which would you prefer? Like, I know that I’m a job market analyst and that I make pretty much everything about numbers, but being upper class isn’t going to do you any good if you hate your job and you’re lonely, burnt out, and depressed. There is nothing wrong with choosing a career simply because it’s near your parents, or simply because you like the city that it’s located in and the job makes you feel cool. If there are a bunch of different things that you want to do with your life, then sure, make a decision based off the numbers. you’re probably going to be better off choosing a career in cyber security than you are in forestry if you’re equally passionate about both of those pathways. But if all things are equal, then I would highly recommend leaning into some of those more superficial concerns in order to make your decision and then do your best to meet those opportunities where they are actually at.
That means figuring out where they’re going to career fairs, what conferences support the industry, which companies are actually hiring interns, and what state those jobs are even located in. Networking via in-person hiring events are going to be the best way to improve your career prospects going into 2026. Because if there is one truth that we saw back in 2025, it’s that online job boards are crumbling under bots, fake job listings, and ATS optimized resume slop.
Conclusion: Navigating the 2026 Job Market
The 2026 job market forecast reveals a complex reality. 56,740 confirmed layoffs in the first quarter. 14.8 million working-age Americans not gainfully employed. Associates degree holders failing to outearn high school graduates. College graduates earning less in real terms than they did in 2019. These aren’t just numbers. They’re the reality facing millions of Americans.
But the forecast also reveals opportunities. Health care and education are hiring. Finance and durable goods manufacturing have low unemployment. The key is understanding where the opportunities are and positioning yourself to meet them. The key is doing your research, understanding what employers actually want, and building the skills and experiences that matter. The key is networking through in-person events rather than relying on crumbling online job boards.
The 2026 job market is challenging, but it’s not hopeless. It requires strategy, research, and positioning. It requires understanding the real numbers behind the official statistics. It requires meeting opportunities where they actually are rather than where we wish they were. This is the 2026 job market forecast. This is the reality. And this is how you navigate it.
Frequently Asked Questions
Q: What are the confirmed layoff numbers for Q1 2026, and what’s driving these layoffs?
A: According to WARN Act reports, which compile 60-day advance notice of layoffs required by federal law, there are 56,740 confirmed layoffs going into the first quarter of 2026. These layoffs are primarily driven by three factors: corporate restructuring (including the “middle management purge” where acquired companies eliminate redundant middle management positions), the financing of AI (companies laying off workers to fund AI investments that haven’t yet shown returns), and companies replacing American staff with H-1B workers (with Amazon being cited as laying off 30,000 American workers while getting approved to hire 40,000 H-1B workers). Additionally, billions of dollars in federal contracts were slashed, causing private companies that relied on government funding to lay off researchers, analysts, and engineers. The trend from 2025, where 1.17 million Americans lost their jobs to layoffs, is continuing into 2026.
Q: What is the difference between the official unemployment rate (U3) and the U6 unemployment measure, and why does it matter?
A: The official unemployment rate (U3) in the US is currently 4.6%, but the U6 unemployment measure is 8.7%, representing 14.8 million working-age Americans. The key difference is that U3 stops counting people who have been unemployed for more than 4 weeks (labeling them as “marginally attached”), people who take temporary or gig work to pay bills (even if it’s not enough to live on), and people who have given up looking for work (labeled as “discouraged”). U6 includes all of these groups, providing a more complete picture of labor market distress. This means one in every 11 working-age Americans wants full-time employment but is either supported by loved ones after layoffs, living on government benefits, trapped in unsustainable part-time work, or competing with young adults for entry-level jobs. The U6 measure reveals the hidden unemployment crisis that the official rate doesn’t capture.
Q: Are college degrees still worth the investment, and what’s happening with associate degree holders?
A: College degrees still provide significant value, with bachelor’s degree holders earning an average starting salary of $66,000 (though this is less in real buying power than the $54,000 graduates earned in 2019 due to 26.7% inflation). Master’s graduates average $82,000, PhD graduates average $104,000, and bachelor’s degrees on average double earning potential compared to non-college graduates. However, associate degree holders are averaging only $42,000 in starting salary, which is functionally no better than high school graduates who didn’t attend college. The median student debt is $20,000-$25,000, with the average at $39,000 (skewed upward by Ivy League and professional degree holders). The federal government is now adding low-earner warnings to FAFSA for schools where graduates don’t outearn non-college workers and capping aid for master’s degrees in fields that don’t require graduate education (like nursing, but not medical doctor programs). While associate degrees may provide better benefits and standard of living, the financial return on investment isn’t there for many programs, raising questions about tuition costs relative to earning potential.
Q: Which industries are hiring versus losing jobs, and what’s the best strategy for finding employment in 2026?
A: The biggest job increases in the past quarter were in private education, health care, and private services (consultants and lawyers), while the biggest losses were in warehousing, car manufacturing, retail trade, and government (with the last two being temporary due to policy changes). Industries with the highest unemployment rates include agriculture, oil and gas, hospitality, retail, and information systems. Industries with the lowest unemployment rates include durable goods manufacturing, finance, education, healthcare, and government. The best strategy is to “meet opportunities where they are” by researching hundreds of job descriptions in your desired field, identifying required education and skills, finding schools that offer those programs with good internship and experiential learning opportunities, checking first destination reports to see actual job placement rates, and networking through in-person hiring events rather than relying on online job boards (which are “crumbling under bots, fake job listings, and ATS optimized resume slop”). The key is understanding what employers actually want and positioning yourself accordingly, while also considering quality of life factors since “being upper class isn’t going to do you any good if you hate your job and you’re lonely, burnt out, and depressed.”
