Labor Market Reshuffling Impacts 2026 Salary Projections Amid Economic Uncertainty

Salary rise projections for 2026 have stalled at 3.4%, reflecting broader economic anxieties and a shifting labor landscape. Despite inflationary pressures and job market volatility, employers are opting for strategic workforce adjustments rather than outright pullbacks. Mitchell Barnes of The Conference Board frames this as a market in reorientation—companies continue to grant raises but are scaling back on hiring incentives, with 60% citing economic uncertainty as the primary driver.

Hiring slowdowns are evident across sectors, with vacancies remaining unfilled for extended periods and temporary layoffs turning permanent. A notable 16% of firms plan to redirect resources toward upskilling current employees, signaling a pivot toward internal development over external recruitment. Payscale's parallel forecast anticipates a 3.5% average wage increase in 2026, marginally below 2025 levels, with only a fraction of employers expanding salary budgets.