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The job market may be about to become turmoil as President-elect Donald Trump takes office for a second time later this month.
Over the past two years, health care has dominated all other industries in terms of growth, fueled in part by coronavirus-related spending. The health care and social assistance sectors added 902,000 jobs in 2024, according to Friday's employment report from the Bureau of Labor Statistics, nearly 966,000 jobs created in 2023.
The government sector came in second place by a large margin, creating about 440,000 job opportunities in 2024, down from 709,000 in 2023.
Part of the growth in health care jobs is also tied to a rising population and the growing number of retirees, said Elise Gould, chief economist at the Economic Policy Institute.
“Medicare and Social Security have been on the rise for years,” Gould told CNBC in an interview on Friday. “Some of that is due to population aging, some of it is just population growth.”
Change is on the horizon
But that may change in a second Trump administration, especially if it leads to mass deportations and renewed controversy over foreign work visas. Immigrants made up nearly 18% of health care workers in 2021, according to the Migration Policy Institute.
“There is already such high demand there, and if we have mass relocations, it will certainly be at the expense of services that can be provided in those sectors,” Gould said. “You could then have a shortage that could lead to more inflation because you would have employers trying to out-compete each other to try to get fewer workers, and that could cause macroeconomic problems.”
The government sector was the second fastest growing sector over the past two years. Much of that growth has occurred at the state level, Gould said. The state government workforce grew faster than local last year, while the federal government employee base rose at a roughly national rate.
But, as with health care, the government sector could see workforce cuts under President-elect Trump's new Government Efficiency Administration, a tough advisory body headed by Elon Musk and Vivek Ramaswamy that aims to cut government spending.
“If you get rid of that kind of policy at the federal level, you're going to lose a lot of highly productive workers, and that could be detrimental to the services they provide, and of course to the economy as a whole,” Gould said. He said. “Unemployment could go up… a lot of things could happen if you hurt that vital federal workforce, and if there's less funding at the same local level, that could be a problem as well.”
Manufacturing growth – perhaps
Conversely, a Trump administration could be positive for sectors like manufacturing and mining and logging, the two groups that saw the weakest job creation in 2024. The tariffs Trump proposes could boost growth in these industries, but Gould said it's impossible to predict. By how much. .
With concerns about sticky inflation looming in the new year, Gould said the focus going forward in the gig economy should be on the share of corporate sector income going to workers versus profits, which she said remains “very, very low.”
“When workers have money in their pockets and spend it on goods and services, that drives the production of goods and the delivery of services,” she said. “Although we have seen productivity growth and inflation decline, there is much more room for wages to rise without putting upward pressure on inflation.”
