how much raise can workers expect in 2026: Expecting a big raise in 2026? New forecasts say most workers will be disappointed
2026 outlook for the US labor market: Hiring slows but layoffs remain limited
Surveys and forecasts show little change from the last slowdown in the job market. Hiring has slowed compared to the surge in the past few years, but companies are also avoiding large-scale layoffs. Ongoing economic uncertainty, exacerbated by unpredictable tariff policies, has made employers hesitant to plan major expansions or launch aggressive hiring sprees.
Average wage growth forecast for 2026 drops to 3.3%
This warning is directly reflected in payment plans. According to a survey by payroll software company Payscale, U.S. employers expect to offer raises of 3.3% on average in 2026, Investopedia reports. This is slightly below the average increase planned for 2025 and is a far cry from the rapid wage increases seen when workers were in short supply.
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Wage growth outlook 2026: Labor market cooling limits wage increases
In 2026, wage growth is expected to remain moderate in line with the cooling labor market. Forecasters at the employment website expect the job market to remain in low gear next year. Job opportunities are expected to stabilize rather than continue to decline, while unemployment is expected to rise only modestly.
Indeed, labor market forecast: Openings stabilize, unemployment rises
This type of environment doesn’t put much pressure on employers to offer large raises. Data from Indeed shows that wage growth based on salaries advertised in job postings is already slowing. According to the Investopedia report, wages rose 2.5% in September, down from a 3.4% annual increase recorded in January.
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Why is the Fed cutting interest rates to support hiring?
Some economists believe the job market could slow further next year, putting additional downward pressure on wages. This outlook helps explain why the Federal Reserve is lowering borrowing costs, a move aimed at supporting hiring.
Labor shortages could limit downside risks to wages
Still, there are signs of potential upside in certain parts of the labor market. Some forecasters say the latest slowdown is due not only to a lack of jobs but also to a shortage of available workers. This dynamic could be particularly important in industries affected by U.S. President Donald Trump’s crackdown on immigrants, according to the Investopedia report.
Construction industry sees wage growth despite weak hiring
Economists at Deutsche Bank, led by chief economist Mathew Luzzetti, point to sectors such as construction where working conditions have tightened recently, according to the Investopedia report. Payroll increases collapsed in these industries, but wages began to rise; This suggests that limited labor supply could support wage growth if demand improves even slightly.
FAQ
Will most workers get a big raise in 2026?
Forecasts show that most workers are unlikely to see big wage increases.
What is the average raise expected in 2026?
US employer plans offer raises of 3.3% on average.
