For jobless Gen Zers, healthcare is the key sector as blue-collar hiring outpaces office jobs, says ADP’s chief economist
ADP’s jobs report landed an unwelcome blow: December data shows private payroll hiring is on the rise, but this gain was countered by a sharp decline in professional and business services roles.
This isn’t positive news for recent graduates who’ve invested tens of thousands in tuition or are looking to pay down debt by securing positions like the ones their parents held. Instead, the sectors showing signs of growth are those needing vocational skills—roles that traditionally don’t demand advanced academic degrees.
The report, released yesterday, revealed the U.S. private sector added 41,000 jobs ahead of Christmas. This recovery might partially stem from holiday seasonality, but optimists could argue it marks a shift from 2025’s slow hiring and low layoff climate.
Leisure and hospitality led job gains with 24,000 new roles, followed by trade and transportation at 11,000. On the flip side, professional and business services cut 29,000 jobs, and information services shed 12,000.
The shift from white-collar office hiring—which boomed during the COVID pandemic—to blue-collar roles in personal services, transportation, and hospitality reflects broader labor market trends: Changes are so fast that each year, new entrants face fresh challenges.
Richardson, ADP’s chief economist, noted recent graduates are struggling in today’s job market. During a media roundtable after the December data release, she told : “A recent college grad’s job market isn’t the same as their older sibling’s. Back in 2023, young job seekers could often set their own terms—working from home or remotely, with a range of benefits.”
However, the industry where job growth is truly accelerating—and will continue for years—is healthcare. ADP’s data shows education and health services added 39,000 workers in December alone. Dr. Richardson explained this is driven by an aging population needing care, plus waves of current healthcare professionals nearing retirement.
“Education and healthcare services are the top hiring markets,” Dr. Richardson stated. “The healthcare sector has an enormous demographic tailwind. Many retiring workers are in this field, so it needs to replenish its ranks.”
As the Congressional Budget Office (CBO) reports, the 65-and-older population segment is projected to grow faster than younger groups on average, pushing up the population’s median age. By 2056, the CBO estimates the Social Security-eligible population will rise from 349 million in 2026 to 364 million.
Gen Z’s job market
Dr. Richardson added that in blue-collar and service roles, candidates are being promoted at the same rate as previous generations due to a severe labor shortage.
That demand hasn’t slowed, whereas office job demand has weakened. For new market entrants, the outlook is grim: “Things have changed drastically. Companies are holding onto workers instead of laying them off, but it’s taking longer to find a job. Our new hire hourly wage data shows no increase over the past 16 months.”
While ADP’s private-sector hiring research has faced scrutiny, Dr. Richardson’s view of a sluggish job market aligns with public data. The Bureau of Labor Statistics’ Job Openings and Labor Turnover Summary (JOLTS) survey released yesterday found job openings held steady at 7.1 million in November—down 885,000 year-over-year. Similarly, hiring numbers and growth rates remained flat at 5.1 million and 3.2% respectively.
“What do I tell my college-age son?” Dr. Richardson asked. “I give the classic ‘follow your passion’ advice—even if it’s not the most practical. More broadly, roles tied to production are likely to thrive over the next two to three years. AI-related jobs are obvious, but be cautious: In tech, deep, specialized skills are valued more than general ones.”
“We’ve seen some growth in finance and accounting, so there might be small signs of recovery there. The overall trend doesn’t capture everything—there are still opportunities to find work.”