Economists say the work of medical workers is the “engine” of the labor market

Labor economists say the move is a worrying sign for job seekers and the U.S. economy, as health-care job growth is supporting the labor market even as many other industries slump.

Employers in the health and social services sector added 695,000 jobs through November 2025, according to data from the U.S. Bureau of Labor Statistics. Meanwhile, U.S. employers added a total of 610,000 jobs over the same period.

In other words, without health care, the economy would have lost about 85,000 jobs.

Health care “remains the driving force behind U.S. job growth,” Daniel Chao, chief economist at career site Glassdoor, said in an analysis Tuesday.

“The non-medical job market does seem to be cooling down,” Zhao said in an interview. “It’s riskier for the economy to stand on one foot than to increase support from a variety of industries,” he said.

Economists say this strength in the health sector is fueled by a major long-term demographic shift in the United States as baby boomers enter retirement.

Older people tend to spend more on health care, which increases the demand for health care services and requires more workers to meet that demand.

Laura Ulrich, director of economic research at Indeed Hiring Lab, said baby boomers are also a “very affluent generation” whose wealth has increased as property values ​​have soared in recent years. Demand for health care is correlated with income, she said.

The health and social assistance sector added about 129,000 jobs in October and November, the BLS reported Tuesday. Overall, the US economy lost 41,000 jobs.

The industry has added jobs every month since January 2022, according to the BLS.

This does not apply to other key sectors such as mining and logging, construction, manufacturing, wholesale trade, retail trade, transport and warehousing, utilities, information, financial activities, professional and business services, leisure and hospitality, and government.

“The U.S. economy is in an employment recession,” Heather Long, chief economist at Navy Federal Credit Union, said in a note Tuesday.

The “vast majority” of jobs added in the past six months were in health care, “an industry that is near constant hiring as America’s population ages,” Long wrote. “Almost every other sector is currently flattening or laying off employees.”

Zhao said the overall labor market has cooled as businesses grapple with relatively high interest rates and “extreme economic uncertainty” surrounding tariff policy and its impact.

He said government workers are also under pressure from the Trump administration’s federal hiring freeze and layoffs.

That said, consumer spending has proven resilient and is likely to provide a backstop to the job market, Zhao said.

Several other industries also added jobs on a net basis in 2025.

For example, the leisure and hospitality sector, which includes restaurants and hotels, added 115,000 jobs through November, while the construction sector added 43,000 jobs.

But the list of industries that are consistently losing jobs is longer than the list of industries that are consistently adding jobs, “and that’s really health care,” Zhao said.

That leaves job seekers in a difficult position, Ulrich said.

Doctors, physical therapists, dentists and many others in the medical field need relevant degrees, training and certifications, which can be expensive and time-consuming to obtain, meaning changing careers isn’t always easy, he said.

“You can’t just snap your fingers and decide you want to be a doctor,” she says.

But economists say people in the medical field enjoy relatively stable employment.

And medical work can extend beyond patient care, they say. For example, hospitals typically employ internal auditors, economists, and information technology workers to help support operations, he said.

Economists say health spending tends to be insulated from economic downturns, a dynamic that could help support the labor market and the economy if the job market cools further.

But economists said demand for health care, and therefore job growth in the sector, could come under pressure as a result of budget cuts by Republican lawmakers.

For example, the Affordable Care Act’s enhanced premium subsidies for consumers who buy health insurance on the marketplace are set to expire at the end of the year after Senate Republicans voted against Democrats’ plan to extend the subsidies for three years. On Wednesday, four House Republicans broke with party leaders and sided with Democrats to force an extension vote. However, a vote could take place in January. According to the Urban Institute, nearly 5 million people will lose insurance when their insurance expires next year.

What’s more, the “big, beautiful bill” Republicans passed in July included cuts to Medicaid that would be in place for several years. For example, starting in January 2026, the law would eliminate enhanced federal subsidies for states that choose to expand Medicaid for the first time, according to the Urban Institute.

“And once health funding cuts begin to take effect, industry employment growth may slow,” Zhao said.

This dynamic will weigh on the economy unless employment growth increases in other sectors.

“When you rely too much on one sector of the economy, you end up in a dangerous situation,” Ulrich said. “Now that’s what we’re doing.”