Navigating 2025: What to Expect for a Soft Landing
As we enter 2025, several key trends will shape our economic landscape. To avoid a rough landing, hiring and quitting must stabilize, and unemployment and layoffs need to remain low (Bureau of Labor Statistics, 2024). Job growth will depend on a steady increase in job openings, with declines below pre-pandemic levels potentially signaling a broader economic slowdown (Economic Policy Institute, 2024). Employers will need to do more with less, addressing the impacts of a dwindling labor supply due to an aging population and pre-pandemic immigration trends (Pew Research Center, 2024).
Wage growth and inflation will need to strike a delicate balance. While wage growth should stabilize to preserve real income gains, looming labor shortages may drive wages up, potentially reigniting inflation. The market is currently balanced, but maintaining this equilibrium will be challenging (Federal Reserve, 2024).
AI and generative AI tools are expected to boost worker productivity, offsetting some effects of labor shortages, especially in industries slow to adopt innovation (McKinsey & Company, 2024). Employers must also embrace flexibility, focusing on reducing degree and experience requirements and increasing skills-based hiring practices to address labor supply challenges (Society for Human Resource Management, 2024).
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