Marketplace - Whats Next For The Job Market In 2026

Episode Date: January 11, 2026

Total jobless claims fell last week, which is the second-lowest reading in the last two years. Experts, though, say it’s likely a seasonal blip — especially since the labor market has been slowing all year. In this episode, what might be ahead in 2026. Plus: Los Angeles expands rent control, influencers change the consumer economy with “shopaganda,” and tribute bands get a moment in the spotlight.Every story has an economic angle. Want some in your inbox? Subscribe to our daily or weekly newsletter.Marketplace is more than a radio show. Check out our original reporting and financial literacy content at marketplace.org — and consider making an investment in our future.

Here's the thing about out with the old, in with the new. The biggest economic stories of 2025 don't end today. They help inform the biggest economic stories of 2026. From American Public Media, this is Marketplace. In New York, I'm Kristen Schwab in for Kyrisdal. It's Wednesday, December 31st, the last day of the year. Good to be here with you. We're starting today with jobs because, honestly, the job market is likely to continue to be one of the key metrics we watch in 2026. We got the latest round of initial claims for unemployment benefits a day early because of tomorrow's holiday. It showed that claims fell last week by 16,000, which means in total there were just under 200,000 claims. That's below what economists were expecting, and it's the second

lowest reading in the last two years. So should this data send us into the new year hopeful that the job market is stabilizing and heading for a rebound? Marketplace's Mitchell Hartman reports. December can be kind of messy when it comes to unemployment data, says Andrew Statener at the Century Foundation. It is always a tricky month to look at the week-to-week claims. And this year, that could be especially true. Businesses may have shifted layoffs to earlier in the year to deal with tariffs. Seasonal trends could be skewing the numbers. Stettner says over 2025 as a whole, unemployment claims have risen about 5%. Frank Fiorelli analyzes employment data at paychecks, a small business payroll processor. He calls the current job market a low fire, low hire environment.

Small employers are now raising pay at well under 3% a year, and workers are staying put rather than switching jobs, unlike a few years ago when people who were leaving for another job were getting really big pay raises and that's just not happening now. As 2025 was drawing to a close, here's how David Royal at Thriven Financial summed things up. I think you see a weakening employment picture. In the delayed November jobs report that came out a couple weeks ago, he points out, not only did overall unemployment rise to a four-year high. The biggest percentage of additional unemployed came in people unemployed five weeks or less. So that implies this is a more recent phenomenon, probably the result of a lot of the layoffs we've seen in the news. One bright spot is that employers have

been increasing hours for existing employees, says Paychecks Frank Fiorelli. That's the first lever that businesses will pull, that they'll start asking folks to work more hours. That could be sort of a precursor to more harrying coming down the pipe. On the other hand, Andrew Stettner at the Century Foundation, sees more headwinds in the forecast for 26, federal spending cuts in health care, the immigration crackdown, uncertainty around tariffs. Plus, he worries about the quality of economic growth, which is still strong, but... A lot of the spending is at the very high end of the job market. A lot of GDP growth is in the AI and the construction around that.

He says economic growth that's overly concentrated is unlikely to support broad-based job growth. I'm Mitchell Hartman for Marketplace. Wall Street today, traders ended a record-setting year feeling a bit sour. We'll have the details when we do the numbers. If I had to pick one economic buzzword to take us into the new year, it would be affordability. Everyone from your next-door neighbor to President Trump, and soon to be New York City Mayor, Zoran Mamdani, is talking about it. And while there are plenty of components that go into what makes life affordable or not, things like groceries and gas, The biggest expense for most people is housing.

Now, different governments are taking different approaches to tackle the cost of it. A common solution is to simply build more homes. But Los Angeles is also trying something else. The city recently tightened its rent control laws. From LAist, David Wagner reports. LAS had rent control for decades. Still, most of the city's renters pay more than what the federal government considers affordable. In a recent meeting, Councilmember Nithia Raman said the city's rent control formula was long overdue for an update.

It has been 40 years since we put this formula together. These extraordinary rent increases are driving people out of the city. Here's how it works now. Landlords can raise rents at least 3% every year and up to 10% in some apartments, but only during periods of high inflation. Low-income immigrant renters like Umberto Altamira say they can't afford any increase. He's a cook who's currently unemployed, and he says he and his wife could end up living on the streets. This year, their rent went up 50 bucks a month.

It may not sound like a lot, but one recent study commissioned by the city found that one out of every 10 L.A. renters is spending 90% or more of their income just on rent. So those tenants are teetering on the edge of homelessness. Before, I'd have to work one or two jobs to pay. Altamira says he used to work two jobs. to pay the bills, but it's hard to find any job now. Landlords say clamping down on rent hikes isn't a long-term solution. The cost of insurance and building maintenance has risen faster than inflation. Megan Berseno is a landlord who owns eight rent control departments throughout L.A.

She was planning to build one new one as an accessory dwelling unit, but she says those plans are now on hold. I don't know how much longer I can continue to do business in a city that's constantly, I feel I'm constantly fighting for my basic property rights here for a basic fair return. Many economists argue the way to get rents down is to build a lot more housing. Fred Sutton with the California Apartment Association says lower rent control limits won't do that. Instead, he says these regulations send a message to developers and landlords. When someone looks at all the hurdles it takes to create homes and operate in the city of Los Angeles, Why would you do it here versus anywhere else in the nation?

Constructing new housing takes years, but rent control can take effect right away, which is why it's politically popular in cities like L.A. David Garcia with UC Berkeley's Turner Center for Housing Innovation says tackling affordability requires a plan for building and a plan for regulating rents. Any politician in a big city right now really has to consider both. And the details are really going to matter. It can't just be political posturing. New home building faces stiff opposition in many L.A. neighborhoods.

The L.A. City Council recently voted not to allow new apartments in most of the city's residential areas. And on rent control, the council ultimately decided to cap increases at 4%. Under the rules, nearly 70% of tenants will be covered. In Los Angeles, I'm David Wagner for Marketplace. In an age, when it is seemingly possible for anyone to, become famous. By taking some photos and videos on their phone and throwing it up online, the market for content creators is growing. Goldman Sachs predicts that by 2027, the influencer industry will hit half a trillion dollars. From the outside, content creation looks like a lot of fun in games.

But remember, social media is increasingly about selling, which means for influencers to make money, viewers have to spend money. And that has changed the way we're marketed to and the way we shop. Mia Sato, a reporter at the Verge, wrote about this in her piece, You are not immune to shopaganda. Mia, thanks for being here. Yeah, my pleasure. So your story starts in a kind of an unexpected place with the history of Pilates,

and it becomes a theme in the story. Tell us about Pilates on the Internet and why you started there. I wanted to start this story with Pilates because I think it represents how everything has become commodified when social media algorithms are attuned to shopping. You know, Pilates has this sort of really raw survivalist origin story where it was created by a man who was an internee at an internment camp in World War I. And the idea was that you don't need too much to practice this exercise. And so I started there because I wanted to show how far we've come and how much consumption and shopping has become part of this exercise. I mean, I always get these videos of women at Pilates wearing piles of dainty chain necklaces

while they're sweating, which I find really interesting. But I feel like really illustrates what you're talking about. Yeah, absolutely. So influence are constantly. content feels really intimate, right? I'm wondering how do these influencers walk the line between fantasy and reality? It's actually a really big part of, I think, what makes this industry work and what keeps it growing. Influencers at all times are towing a line between being polished and entertaining and brand safe, right? So brands want to send them product for them to feature

and content while at the same time feeling like your friend. They want to be authentic. They want to be relatable. And when you think about how people consume this content, you are holding them in the palm of your hand on your phone. You're watching them at night on the couch after a long day of work. And so when you look at it that way, influencers have to be both the perfect salesperson and your best friend. And so, you know, when it comes to shopping, really, I think you see they want to, they want it to feel like it's a friend recommending something. It's a way to build trust and also obviously move product for brands. You know, for all the creators who are peddling stuff, there are also people who are de-influencing. Tell us about the de-influencer movement. Yeah, it is part of a sort of series of

different mini-movements or mini-trends, maybe, that have popped up in the last couple years. So there's de-influencing, which is the concept of like, I'm going to undo. the part of your brain that wants this thing you saw on social media. There's also something called under-consumption core, which I find frankly hysterical because the idea is that like we buy so much stuff that owning a normal amount of things like should get its own name. How novel. How novel. Yeah, right. The under-consumption is like, I'm going to wear my jeans until they're not

appropriate to wear anymore or like I'm going to wear my jeans until they have a hole at which point I'll buy a new pair, which seems like very normal to me. But the D-influencers are fascinating because not only do they tell you what not to buy, often that's followed up in the same breath with here's an alternative that you should buy. And so you kind of end up in the same place, which is, you know, separating the viewer from their money. Hmm. I'm wondering as someone who reports on this world all the time what your relationship with social media is like and when the last time you were influenced, what did you buy? Okay. This is so embarrassing, but literally this morning, I saw a video. I saw a video of a woman with like some sort of like active wear pants. And I literally. have the tab open on my phone for the pants right now because I was like maybe I'll buy them

later today. I don't need more clothes, by the way. So this is like firmly in the world of what I was writing about. And actually, that's a really big reason why I wanted to write this story was because I felt my shopping habits have changed. You know, a lot has changed in my life in the last five years since the onset of the pandemic. But I absolutely buy more stuff than I used to. to. And it's sort of like the frictionlessness of the apps have really become the way that people experience online shopping. You see someone talk about a product and it takes like two clicks to go buy it. Sometimes you can buy it right in the app. And I want to mention too that the whole world of like shopping addiction or compulsive shopping is really maybe underappreciated or understudied.

There is no official medical diagnosis for that when, you know, a lot of people, I think, feel that it is an addiction. You know, there, I think that's like a place for rich research that a lot of people could use. Mia Sato is a reporter at The Verge. Thanks, Mia. Thank you so much. Coming up. It's just like the real thing, but less expensive. Who doesn't love a good dupe?

But first, let's do the numbers. The Dow Jones. Jones Industrial average fell 303 points, 610th percent, to close at 48,00663. The NASDAQ lost 177.7% to finish at 23,241. And the S&P 500 dipped 50 points, also 710th percent, to end at 6845. This day being the last of 2025, let's look at the major indices for the year. The Dow added 13%. The NASDAQ rose 20%. The S&P 500 gave a gained about 16% in 2025. Now for some companies and how they did the whole year. AI darling Nvidia rose 40%, alphabet rang up 65%. In the earth moving space, Caterpillar rose about 58% while deer and company managed 10%. Today, bonds fell.

The yield on the 10-year T-note rose to 4.16%. You're listening to Marketplace. This Marketplace podcast is supported by Intuit QuickBooks. In a new year, momentum matters. For small business leaders, every smart decision comes down to cash flow, which determines where you stand today and how you move forward tomorrow. With Intuit QuickBooks powerful money management solutions, gain the clarity and control to turn cash flow into confident growth.

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Licensed as a money transmitter by the New York State Department of Financial Services. This is Marketplace. I'm Kristen Schwab. As we shift into a new year, we shift into new policies. Today was the last day to qualify for a federal tax credit for the installation of rooftop solar panels. It's just one of the changes in Washington that clouded the outlook for the solar industry this year. Meanwhile, other tax credits for large commercial solar installations are still available, but they'll end years earlier than originally planned because of President Trump's tax and spending bill passed in July. And yet, according to the energy analytics firm Wood McKenzie, solar made up 58% of all new energy generation through the first nine months of this year.

Marketplaces Henry Ep has more. To describe solar energies 2025, Abigail Ross Hopper with the Solar Energy Industries Association turns to Dickens. I'll borrow a phrase from a renowned author. It was the best of times and it was the worst of times. Solar companies now have a lot less time to qualify for federal tax credits. And she says some solar projects have had trouble getting federal permits. There have been delays and stoppages and just outright like lack of response from federal agencies. And yet we just keep building more solar, partly because those tax credits are going away.

And that gives extra reason for developers to try to build their solar projects now. Daniel Cohen is a professor of environmental engineering at Rice University. Solar is also growing because energy demand is rising fast from new data centers and manufacturing plants and electric vehicles. The only source of new power that can grow very quickly and scale up is solar. Every other source of energy has key barriers that keeps it from growing in the near term. New coal plants aren't really a thing. The Trump administration has shut down several major offshore wind power projects. Nuclear power will take five to ten years to build, Cohen says, and new natural gas turbines are backlogged.

There's only so much new natural gas power capacity that can be added anytime soon. That leaves solar is the biggest option and really the only one that can be scaled up in the next few years. It's also gotten cheap. So have battery storage systems, says Rob Gramlick, head of the consulting firm Grid Strategies. Put solar panels and batteries together, and you can, can power the grid even when the sun isn't shining. You can run the most of the grid on solar through the afternoon and then into the evening when you're still running air conditioning in the hot summers. Then you have the batteries that were charged in the afternoon delivering power through the evening. It's been a really good year for that combo. The energy analysis firm Wood McKenzie

finds that solar and storage together made up 85% of all-new power generation in the first nine months of this year. I'm Henriette for Marketplace. The eight days between Christmas Eve and New Year's Eve are usually the biggest movie-going days of the year. The box office winner so far is the third installment of Jane Cameron's Avatar franchise. It grossed $760 million globally after the last two weekends. A bit farther down in the box office rankings, number eight last weekend, was a movie called Song-sung Blue. The semi-true story stars Hugh Jackman and Kate Hudson. They play two musicians who form a Neil Diamond tribute band.

And maybe this is all just a coincidence, but tribute bands are having a moment right now. Sure, that has a lot to do with nostalgia, but also a bit to do with economics. Marketplace's Maria Hollenhorst reports. At 6.45 on a Monday night, a crowd gathered outside Whiskey Agogo, a famed West Hollywood venue that is hosted Guns and Roses, Jimmy Hendrix, and The Doors.

Huge Doors fan. I was out here for the 60th anniversary show. I just love The Doors. I'm a huge Doors fan, and I've always won together whiskey. These fans were from all over the country. Ross Seafurt flew in from Wisconsin just to be there that night. Yes, I did. And I fly out tomorrow. They're here for a celebration of Doors frontman Jim Morrison's 82nd birthday. So when a man walked through the door, sporting curly dark hair, a cross hanging from a chain on his neck and leathery pants, a whisper of excitement went through the crowd.

My life revolves around Jim Morrison. I'm a huge fan. That's Sterling Sinclair. She's only 25 years old, by the way. I don't remember it, but it's literally most of the music I listen to. And I mean, I'm never going to be able to see him live. Of course she won't, because Jim Morrison famously died in 1971. You can visit his well-decorated grave in Paris, which means that the guy with the long, dark hair, taking the stage that night, is just a guy. I'm a partner in investment management firm in Santa Monica.

A 45-year-old finance guy named John Nagel, who likes classic rock and started jamming with another dad he got to know at a kid's birthday party. That's not a dad joke. That's their origin story. My guitarist and co-leader of the band, he was like, you know, we should just do the doors. because you sound just like Jim Morrison, we should just do that. The tribute band they formed is called Mojo Risen. It's a lyric reference to the door song, L.A. Woman. And all four band members have day jobs.

They get paid a few thousand dollars for gigs like this one. The whole tribute band scene has given us an opportunity just to have fun and make a little money on the side. But to me, the main thing is just like the audience reactionist. You get such a kick out of that. It's just like the real thing, but less expensive, which ended up being our tagline. Michael Twombly has been part of this scene since 2008. I don't have much to brag about in my whole life, but I, without a doubt, I'm the most knowledgeable guy on the planet about tribute bands. He's in a tribute band called The Cured. Guess what they play? But mostly, he's a booking agent for other tribute acts.

I've got 1,700 of them, and I keep an eye on all the others, and I even watch the European ones. Over the past couple of decades, live performance has become increasingly important to musicians' bottom lines. And Twombly says a lot more tribute bands have popped up. Some made up of professional musicians trying to supplement their income, and some that are just hobbyists like John Nagel. Problem is, they start them to whatever their favorite band was in high school, not what the market needs.

So what does the market need? Well, definitely not more classic rock, according to Twombly. Led Zeppelin, Grateful Dead, and ACDC Tribute. are a dime a dozen. So we are focusing on building Taylor Swift, Bruno Mars, Rihanna, that sort of thing. Sure, it's not the real Rihanna, but when's the last time she toured? Rock out of Rihanna is really good. Tribute bands typically don't pay royalties directly for the songs they play live.

That's covered by venues under the same licensing agreements that allows any band to play covers. And tributes can play on a range of stages, from 10,000-seat casinos to free concerts in the park. What's the other option? Hire the Real Act for $70,000. And at $70,000, you get an act with three hits in their career. Or they can get in a Fleetwood Mac tribute band and know every song over 90 minutes. And at a time when average concert ticket prices have reached triple digits and the labor market is cooling, consumers may pull back spending on pricey shows. In 2025, the live entertainment business grows 6% less than 2024's record highs.

That's according to an analysis by Polestar. It actually helps us. The big concerts will go before tributes go. We've had like Live Nation call us go, we don't want to take a risk on these acts. We're going to put in a bunch of tributes tied us over because the risk is way less. By the time Mojo Risen, the Doors Tribute, took the stage at the whiskey. About a hundred or so people had gathered.

Yeah, I think we're ready. The cheapest tickets were $23, though some bought VIP seats for more. And the bar was packed. They bring a lot of people. Tisa Myler, Whiskey A Go-Go's general manager, said it was a respectable crowd for a Monday. The club host tribute bands a couple times a month. They enjoy all those songs that they play. You know, if they're doing the 80s and the 90s and stuff, people love that kind of stuff.

Ross Seafir, the guy who flew in from Wisconsin to be there, hung on to the edge of the stage the entire set singing along. And on the wall, a drawing of the actual Jim Morrison with an angel halo above him. Face the stage where another Jim Morrison, kind of, closed out the night. I'm Maria Hollandhorst for Marketplace. This final note on the way out, I asked our producers if we could end the show today with some optimism. They smiled a little skeptically and said they'd give it the old college try. Because frankly, a lot of what dominated business news this year was maybe not always positive.

So here are some super great things we came across that will help us go out on a high note. One, not a single hurricane made landfall in the U.S. this year, the first time that's happened in a decade. Two, a record number of people in the world now have access to some four. of social protections, according to the World Bank. And three, there were a bunch of wildlife wins. Green sea turtles are no longer endangered, and salmon returned to parts of the Klamath River in Oregon and California after disappearing for more than a century.

Our media production team includes Brian Allison, John Fokie, Montana Johnson, Drew Jostad, Gary O'Keefe, Alex Simpson, and Charlton Thorpe. And I'm Kristen Schwab. Have a happy new year. We'll meet back here in 2026. This is APM. Hey, it's Dave Obrancaccio, host of the Marketplace Morning Report. It has been one year since the costliest set of wildfires in California history, U.S. history,

and by at least one calculation, the history of the world, 16,000 structures were destroyed, most of them homes. I can quote your figures about insured versus uninsured losses measured in billions. But as people in the fire zones face year two, we go from macro to micro. I'm checking in with the neighbors on one street in Altadena, where 15 homes were destroyed on a single block. These are my own neighbors. I lost a home on that street, too. Join us for on the ground reporting as we hear from people still dealing with insurance, getting permits, finding contractors. One guy had to go through 30 contractors to find one with the right skills he could afford. Plus, for most, rebuilding is taking years. How do

people find the money to live elsewhere. Listen to the Marketplace Morning Report using your favorite podcast app.