An economist explains where the U.S. job market is heading in 2025

The job market has seen some major pendulum swings in the past few years, from an abundance of jobs during the Great Reshuffle to what feels like job opportunities now being a bit less in reach. In fact, according to a recent survey from LinkedIn, 43% of Americans say that they feel stuck in their jobs right now and the sense that there are no job opportunities out there is a big reason for this.

However, it’s not just perception. Over the past two years, not only has hiring continued to stall, but we’ve seen job competition rise, too. There are now 2.5 applicants per open job on LinkedIn (compared to 1.5 in 2022), and job search intensity has increased, with the average number of applications per applicant increasing by 4% in the U.S.

Moving into 2025, many professionals hope to see the job market pick up and new opportunities become available, but will they? The answer is yes, but it will be gradual.

Low unemployment will persist, but hiring will still happen in some sectors

The global economic outlook is expected to hold up next year, which means that we will likely see some economic growth and continued low unemployment, by historical standards. However, economic growth will not happen evenly across all industries. According to LinkedIn data, we’re expecting to see hiring pick up in several key industries, including defense, energy, and technology.

The technology job market, in particular, has seen a slow but steady recovery following a significant dip in hiring and remains the strongest industry in terms of year-over-year hiring. We also expect to see hiring remain robust in healthcare, which has been one of the few industries that has weathered the storm particularly well.

On the flip side, though, other industries may not have that same fortune. We expect a continued stalling in professional services, retail, and government.

Despite some positive signs, there remains a lot of uncertainty about what economic policy will look like in 2025. With a lot still up in the air, many companies will continue the wait-and-see approach to hiring that they’ve embraced over the past two years. Without that optimism and certainty to encourage investment, we’re unlikely to see significant job creation, at least not in the first portion of the year. For those job seekers who do feel stuck, leaning into the industries and metros where hiring is solid will be key.

Bring your own AI

AI adoption, as well, is likely to ramp up significantly in 2025 as companies begin taking a closer look at their AI investments and put organization-wide plans and strategies in place.

Since Gen AI went mainstream at the end of 2022, we’ve largely observed employees and professionals taking a BYO-AI approach to experimenting with these new tools. This has led to many companies trying to keep up, rather than take the lead on AI adoption.

According to LinkedIn’s Executive Confidence Index, just 10% of global executives say they are leading in implementing GAI, and approximately 40% of executives said their organization has limited leadership alignment, tools, and ad hoc processes in place for AI adoption. And surprisingly, nearly a quarter of executives globally said that their organizations have not yet even begun the process of integrating AI.

Moving into 2025, I think we’ll see this shift as companies begin to reckon with the fact that they can either lead or be left behind when it comes to transformations and innovations possible with AI. We’ll also begin to see the fruits of early adopters’ labors, with investments in AI beginning to pay off and tangible case studies coming into focus.

The C-Suite will look different

The makeup of executive leadership teams will also see a shift in the new year, as a change of the guard begins to unfold. Next year will usher in the age of the millennial C-suite, with millennials projected to overtake Gen X as the top generation holding C-level roles. With this transition will come a new type of leadership, one where skills and experiences are more diversified than in the past and with a bigger focus on soft skills.

Less than a decade ago, in 2018, 87% of executives had only worked in one job function in their entire careers, and 89% had worked at only one company before landing an executive role. Those numbers have dropped to 59% and 63%, respectively. At the same time, we’ve seen a 30% increase in soft skills among executives in the C-suite than the typical executive had in 2018. All of this points to a trend we’ve observed at LinkedIn—that careers are no longer linear, and that transferable soft skills can make cross-functional and cross-company moves easier for professionals which changes the job market significantly.

While we’ve been trapped in a stagnant and challenging job market it’s also clear that work is changing faster than ever. From new technologies to where and how people work, 2025 is poised to bring continued change to the workforce. And because of this, companies and professionals need to stay adaptable, skill up, and always be looking around the corner. There’s a lot of opportunity yet to be realized.