Labour market: towards "stability" or slow deterioration in 2026?

The decline was contained to 28.700 jobs destroyed in the 4th quarter (-0,1%), after similar losses in the 3rd quarter, of 27.300 jobs lost (also -0,1%), according to provisional figures reported Friday by the National Institute of Statistics.

Over the year, salaried employment in the private sector fell by 0,2%, representing 40.800 jobs lost compared to the 4th quarter of 2024, according to its press release.

"Salaried employment still largely exceeds its pre-health crisis level in 2019, by 5,3% (i.e., +1,1 million jobs)," adds INSEE.

Despite this relative stability, the fourth quarter will mark, if these figures are confirmed on February 27, the fifth consecutive quarter of decline in private sector salaried employment, after a period of strong growth following the health crisis in 2020-2021.

These data "confirm the entry into a phase of stabilization of private sector salaried employment", the Ministry of Labour said in a statement, adding that "all major sectors maintain a higher level of employment than before the crisis, reflecting consolidated structural gains".

"This still confirms that we are rather in a phase of adjustment of the labor market," notes economist Mathieu Plane, deputy director of the Analysis and Forecasting department of the OFCE, who predicts 60.000 salaried jobs lost in 2026.

"I don't think we're in a situation where the job market is going to deteriorate very sharply, but I also don't see an intense rebound, certainly not at the level of salaried employment," anticipates Charlotte de Montpellier, an economist at ING bank.

"Not very dynamic"

Business creation reached a new record in 2025, at 1,17 million, but in 65% of cases these are self-employed individuals whose average income is very low and who are sometimes also employed.

For Mathieu Plane, "the good news is that growth is not collapsing at the moment", but with a "rate around 1%, if there is no support from public policies, with the deflation of past public policies, we still have an adjustment on employment".

And with "a growing working-age population, this isn't enough to stabilize unemployment," according to the economist. The OFCE forecasts the unemployment rate at 8,2% by the end of 2026, compared to 7,7% in the third quarter of 2026. INSEE will publish its figure for the fourth quarter on February 10.

The Ministry of Labour reported on Thursday a 2% increase in job seekers registered with France Travail in the fourth quarter, not counting the new categories registered (RSA beneficiaries and young people in integration pathways) and once the effects of the change in the sanctions regime which resulted in fewer deregistrations have been corrected.

"At a time when we might need some budgetary leeway to support the economy and job creation, we are in the opposite phase" with the need to reduce the public deficit, observes Mathieu Plane.

"We are in a labor market that is not very dynamic" but "this does not lead to a major risk of the unemployment rate exploding," reassures Charlotte de Montpellier, for whom the weakness of employment will not "weigh on the purchasing power of households".

Temporary employment, often considered a leading indicator of the future trend in the labor market, was stable in the fourth quarter, with 800 jobs gained (+0,1%) over three months, after a decline of 4.300 jobs in the previous quarter (-0,6%).

By sector, salaried employment rebounded in agriculture in the fourth quarter (+2,6% after -3,5% in the third) and declined very slightly in industry (-0,1%), in construction (-0,2%) and in the market services sector (-0,1%).

Illustrative image of the article via Depositphotos.com.