OECD Employment Outlook 2026: United States
Table of contents
These country notes provide an overview of the labour market situation in each country based on data from OECD Employment Outlook 2026. This edition has a special focus on geographic disparities in jobs and incomes.
The OECD labour market remains resilient, with employment and labour force participation rates at record highs (72.1 and 76.7% in Q1 2026 on average across countries, respectively) and unemployment low by historical standards (4.9% in May 2026). However, there are increasing signs of weakening, including rising unemployment in many countries, slowing employment growth, and easing labour shortages. Due to the new surge in energy prices, real wages are expected to fall in many countries.
The United States labour market has remained resilient over the past year, with only modest signs of a possible slowdown. In June 2026, the unemployment rate stood at 4.2% – 0.1 percentage points (p.p.) above its level a year earlier and below the OECD average of 4.9%. In the year to Q1 2026, the employment rate was unchanged at 71.8%, only marginally below the OECD average of 72.1%. Over the same period, the labour force participation rate edged up by 0.1 p.p. to 75.1%, still below the OECD average of 76.7%.
Young people in the United States have become increasingly exposed to unemployment. Notably, since early 2024, the unemployment gap relative to the wider working-age population has widened not only for young college graduates – a trend observed across all countries analysed – but also for those without a graduate degree, a pattern so far seen only in the United States and Canada.
Labour market tightness has been slowly decreasing in the United States since its peak in Q2 2022 and it is now 0.2 vacancies per unemployed person below its level in Q4 2019 – the second largest decline in the OECD after Germany. Nevertheless, labour market tightness remained high compared with pre‑crisis levels in accommodation and food service activities, information and communication, and real estate.
In the year to Q1 2026, real wages in the United States grew by 0.6%, but remained 1.4% below their Q1 2021 level, prior to the post-COVID‑19 inflation surge. OECD projections point to a recovery ahead for real wages, on the assumption that the disruptions from the conflict in the Middle East are sizeable but limited to a relatively short period of time.
Globalisation and digital technologies continue to reshape local labour markets across OECD countries, but the effects differ substantially across regions. Areas highly exposed to import competition from low-wage countries often face persistent manufacturing job losses, while regions exposed to digital technologies tend to experience stronger growth in non-routine and higher-skilled employment.
In the United States, regional exposure to low-wage import competition from China since 2001 was associated with some of the largest declines in manufacturing employment across OECD countries: in a region with high rather than average trade exposure (around the 80th to 90th percentile versus the median), the associated loss amounted to about one in seven manufacturing jobs (see figure below). These losses were offset by gains in non-manufacturing sectors, partly reflecting that the growth in imports was not matched by a comparable rise in exports as, for example, was the case in Germany.
The decline in regional manufacturing employment in the United States in response to low-wage import competition is driven largely by flows into and out of employment, while mobility between regions and industries plays only a minor role. Age‑related mobility is the dominant adjustment channel in the United States: older workers exit manufacturing – often permanently – while younger workers enter non-manufacturing jobs in more trade‑exposed regions.
During the 2010s, regional exposure to digital technologies was associated with a persistent increase in total employment in the United States, as well as in Europe. These effects are largely driven by producer services and non-routine occupations, while regions specialised in routine manual tasks – where technology tends to be labour-saving – have seen a decline in their employment share.
Non-compete clauses – contract terms that prevent workers from moving to a competitor or starting a competing business – and related contractual restrictions are widespread across OECD labour markets. They covered about 30% of workers in 2025, and are increasingly used beyond highly specialised jobs. While firms may use such clauses to protect trade secrets or investments, evidence suggests they can reduce job mobility, weaken wage growth, slow knowledge diffusion and undermine productivity growth.
While several states have long prohibited or recently banned non-competes and others restrict their use for lower-income workers, the proposed federal ban by the FTC was vacated, with federal action now focussed on targeted enforcement against overbroad or anticompetitive uses.
The United States remains among the more permissive OECD jurisdictions in the regulation of non-compete clauses: in the median US state, non-compete clauses are more easily enforced than in most OECD countries.
Non-compete clauses extend well beyond workers with access to trade secrets, including in low-wage occupations. New OECD data confirm that this pattern is widespread across OECD countries.
The OECD report finds that non-compete clauses reduce wages, labour mobility, entrepreneurship, innovation and productivity. Such clauses can have chilling effects on worker mobility even when legally unenforceable, underscoring the importance of transparency, worker awareness and effective sanctions against overbroad use.
Antitrust enforcement against no-poaching and wage‑fixing agreements has intensified in recent years, with the United States recording its first successful criminal conviction for wage‑fixing in April 2025. The report’s findings, linking awareness of no-poaching arrangements to weaker productivity-enhancing labour reallocation, support continued enforcement of existing competition laws.
Contact
Andrea SALVATORI (✉ andrea.salvatori@oecd.org)
Mark PEARSON (✉ mark.pearson@oecd.org)
This work is issued under the responsibility of the Secretary-General of the OECD, and does not necessarily reflect the official views of OECD Member countries.
This document, as well as any data and map included herein, are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area.
The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law.
Note by the Republic of Türkiye
The information in this document with reference to “Cyprus” relates to the southern part of the Island. There is no single authority representing both Turkish and Greek Cypriot people on the Island. Türkiye recognises the Turkish Republic of Northern Cyprus (TRNC). Until a lasting and equitable solution is found within the context of the United Nations, Türkiye shall preserve its position concerning the “Cyprus issue”.
Note by all the European Union Member States of the OECD and the European Union
The Republic of Cyprus is recognised by all members of the United Nations with the exception of Türkiye. The information in this document relates to the area under the effective control of the Government of the Republic of Cyprus.
The full book is available in English: OECD (2026), OECD Employment Outlook 2026: Geographic Disparities in Jobs and Incomes, OECD Publishing, Paris, https://doi.org/10.1787/7e710f54-en.
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