JPMorgan says the labour market will dominate Wall Street’s macro focus heading into 2026, with chief US economist Michael Feroli warning that the softening in job conditions is becoming harder to ignore. In a note released Wednesday, he said weakening labour demand is now joining the well-flagged slowdown in labour supply, pointing to several quarters of cooling hiring and more recent signs of rising layoffs.

Feroli expects the next three to six months to deliver “uncomfortably slow” job creation, adding that the resulting drag on labour income poses broader risks to the economy. His comments followed ADP figures showing an unexpected drop in November private-sector payrolls.

At the same time, Feroli argues that inflation is unlikely to fall back quickly. Stickiness in price pressures into 2026, combined with a levelling-off in labour-market deterioration, should limit how much additional easing the Federal Reserve can deliver next year.

JPMorgan is still calling for near-term rate cuts — in December and January — driven by weakening labour data. But Feroli expects the Fed to stop easing after those moves, saying the combination of a stabilising labour market and inflation still above 2% will leave little room for further reductions.