NH Labor Market, Wage Growth Stagnated Last Year

Those headwinds contributed to a chilled but relatively stable hiring market in 2025, according to an April 17 report from the N.H. Fiscal Policy Institute. Despite the challenges, the state’s labor market was strong compared to Vermont, Massachusetts, Maine and the United States as a whole.

While the Granite State’s hiring market was healthy in 2025, fiscal and geopolitical currents seemed to give employers pause, the report said. Businesses are less likely to expand or make new investments when costs, demand and the state of the economy are difficult to predict.

That trend could continue into 2026, according to the report.

“New Hampshire’s labor market remained robust; however, it is not dealing with the tight conditions of the past few post-pandemic years,” the report said. “Hiring slowed and total employment softened over the second half of 2025. Unemployment crept up as more workers entered the labor force, and wage gains have not kept up with inflation.”

The Monadnock Region is currently experiencing similar conditions, according to Patty McGrail, senior vice president of Leddy Group, which owns Masiello Employment Services in Keene. Due to current economic conditions, companies are being more reserved in their hiring practices and making sure they have the right candidates.

“It’s a stable but tight labor market,” she said. “Based on what we’re seeing, things are going to be a little bit more challenging before they loosen up a bit.”

The makeup of New Hampshire’s job market has shifted since the COVID-19 pandemic — there is no longer a shortage of workers, but an increase in people looking for employment, per the report. In 2022, at the height of market pressures, there were 3.5 jobs for every unemployed person, but that shrunk to roughly one opening in December 2025.

While results are mixed, the hiring cooldown affected multiple business areas, the report found. New Hampshire’s largest sector, health care and social assistance, added 2,200 employees, expanding by 2.2 percent. Meanwhile, arts, entertainment and recreation added 900 workers, growing by 5.9 percent.

In the Keene area, employment trends are also varying among different industries, McGrail said. Employees for the skilled manufacturing and engineering industry are currently in high demand, while the need for professional staffing, like administration or human resources, is less.

Across New Hampshire, the manufacturing and wholesale trade sector felt the most significant losses last year, dropping 1,200 jobs — or 1.7 percent — while the wholesale trade industry tumbled by roughly 1,200 jobs, a 4 percent drop, NHFPI’s report said.

Retail trade, which used to be the Granite State’s largest employment sector until health care and social assistance overtook it in 2019, has been shrinking over time, the report said. The sector lost 1,000 jobs, or 1.1 percent in 2025.

Employment for the federal government and state government both fell, 3.3 percent and 3.5 percent, respectively, per the report. Local government saw a small increase of 0.2 percent, and other employment sectors remained mostly stable.

Hiring was not New Hampshire’s only economic indicator to slow in 2025 — wage growth decelerated, too. The average pay for a private-sector employee dropped by 2.2 percent from 2024, after adjusting for inflation, NHFPI found. That means that, while employees’ salaries may have increased, they had less purchasing power.

It is also the first time that those wages have decreased in two consecutive years since 2018 and 2019, the report said.

Hourly earnings fell across most industries as well, the report said. Adjusted for inflation, the hourly earnings for private employment fell 2.2 percent from 2024 to 2025. Private education and health services saw the biggest drop in wages at 4.9 percent, closely followed by professional and business services at 4.5 percent.