The other day, we were talking with someone who tried to play golf professionally in the mid-90s. This was right as Tiger Woods was coming on the scene. To see what the buzz was about (he told us he wasn’t buying the hype), he went to the Phoenix Open in 1997 to see young Tiger play.
When he first walked up to Tiger’s group, he couldn’t get close enough to see him swing. But he heard him swing. And from only the sound of the ball striking the club, he knew Tiger was different.
We are very much “math & data people”. Between the two of us, we’ve taken almost all the math you can take: arithmetic, algebra, geometry, trigonometry, calculus, multivariable calculus, linear algebra, differential equations, statistics, probability, stochastic modeling, queuing theory, optimization, simulation, econometrics…
So when someone asks us about the labor market, you’d think we’d point to charts, formulas, and spreadsheets. But our brains are actually doing a lot more than guessing when we rely on instinct. Scientists think the average adult brain has roughly 86 billion neurons, and each one can form thousands of connections. That adds up to trillions of possible pathways firing and adjusting every time we take in new information. Each time a golfer hears a club hit a ball, neurons fire, patterns strengthen, and the brain stores another data point. It feels like a gut reaction. But it’s really accumulated data. After hearing that sound tens of thousands of times, the “instinct” becomes a compressed, high-speed output.
And when it comes to the labor market lately, our instinct is to answer the way the Tiger skeptic did when he heard him hit a ball.
Part of that is because the data may be wrong. Fed Chair Jerome Powell said this week the U.S. might be overstating job growth by as much as 60,000 jobs a month. If that’s true, the economy may have actually been losing jobs for most of the year.
Part of it is because when visibility is low, pressing too hard to draw conclusions from imperfect data is like squeezing Jell-O. The tighter you grip, the more difficult it is.
And part of it is trusting the pattern recognition from what we are actually hearing on the ground.
So what does our gut say about 2026?
- AI’s impact will increase in 2026, especially for white collar roles. We are already seeing signs such as fewer backfills, hiring freezes, and more common as of late: layoffs. We expect this trend to increase in 2026 given economic conditions.
- Despite this, the labor market will remain tight-ish, especially for blue collar talent. Barring a major economic shock, unemployment is still relatively low historically, and demographic trends, slower immigration, and the time for workers to reskill will keep certain labor pools constricted.
- The combination of #1 and #2 will push the pendulum further toward employers. Lower wage pressure, more return-to-office momentum, and more demanding employers.
So what does this mean for your 2026 plans?
First, top talent will be stickier. People don’t move as willingly in uncertain markets. If someone great is on your team, invest to keep them.
Second, blue collar roles will need strategy. Upskilling, reskilling, and partnerships will matter. This part of the market will not loosen from where it is today on its own.
Third, stay flexible. We recommend keeping part of your workforce variable. Yes, self-serving advice for us, but it is also good risk management. Contract talent keeps you on your toes in times of uncertainty. And in the current market, it’s easier than in prior years to bring on talent in a contract or contract-to-hire capacity.
The data may be tough to read right now, but if you’ve been following along you can hear what it’s saying.
Until next time,
Your Spherion South Central WI & Northern IL team