1/ The latest payroll data reveals a clear divergence in the U.S. labor market. Since January 2024, job growth has been heavily concentrated in healthcare and private education. Strip those sectors out, and cumulative job gains flatten before turning negative by late 2025. The overall headline growth masks a much narrower base of expansion.
2/ Healthcare and private education have added roughly 1.7 million jobs since early 2024. These industries are structurally labor-intensive and predominantly in person. Hospitals, outpatient care centers, nursing facilities, and schools require physical staffing, and demand in these areas has remained steady. Their consistent hiring is the primary reason total nonfarm employment continues to show net gains.
3/ Outside healthcare, the picture is markedly weaker. By the second half of 2025, cumulative job growth across all other sectors moved below zero. The decline spans several industries, including manufacturing, information, and professional services. While some sectors posted temporary rebounds, the broader trend suggests limited hiring momentum outside health-related fields.
4/ Many of the sectors experiencing softer growth are those more exposed to remote and hybrid work arrangements. After the rapid expansion of remote-capable industries earlier in the decade, firms have shifted toward cost discipline, automation, and productivity optimization. Slower net hiring does not necessarily signal contraction in output, but it does reduce payroll growth relative to healthcare.
5/ The result is a labor market increasingly supported by in-person service industries. If this divergence persists, employment growth may remain concentrated in healthcare and similar essential sectors. The next several payroll reports will determine whether non-healthcare industries regain momentum or whether the current imbalance continues.
Dataset
Data Sources
U.S. Bureau of Labor Statistics (BLS), Current Employment Statistics (CES), All Employees, seasonally adjusted payroll employment by supersector, January 2024–January 2026.
https://www.bls.gov/ces/
Bulk time-series files:
https://download.bls.gov/pub/time.series/ce/