Turn on the news and you’ll see hundreds of headlines like this “A recession is guaranteed. But when?” or this: “America is heading for a recession — and it may be the worst yet.” An analysis of the New Hampshire economy and labor market shows a more nuanced story than national headlines suggest. New Hampshire’s economy is still relatively strong by many traditional indicators, but for many families it’s getting harder to keep up. And if you’re feeling like your paycheck isn’t stretching as far as it used to, you may not be imagining it.
Let’s start with the basics. New Hampshire still has a low unemployment rate at just about 3%, but that doesn’t tell us everything about the economy. Employers added fewer jobs in 2025 than in the previous year, and by the end of last year, there were 8,800 fewer jobs than in December 2024. At the same time, more people are looking for work. In February 2022, there were an estimated 3.5 job openings for every unemployed person in the state, but by the end of 2025 that number dropped to about 1 job opening for every unemployed person.
There is a similarly-mixed picture for which sectors are adding jobs. While Health Care and Social Assistance grew by 2,200 employees and Arts, Entertainment, and Recreation employment grew by 900 workers, Manufacturing declined by 1.7% and Wholesale Trade fell by about 4%.
But perhaps the most important shifts are what is happening with wages in New Hampshire. While New Hampshire’s average hourly wage increased slightly from 2024 ($35.22) to 2025 ($35.53), those numbers don’t tell the full story. Once you factor in inflation and particularly the rising costs of groceries, health care, and other every day essentials, a New Hampshire worker earning the average wage effectively saw a 2.2% pay cut. That means despite growing paychecks, those dollars cannot buy as much as average wages could the prior year.
For many families, this can translate into cutting back and making tough choices, especially when a quarter of Granite Staters had less than $2,000 in emergency non-retirement savings in the most recent data. It also isn’t a blip. This is the second year in a row that inflation-adjusted wages have declined.
Just as families are facing uncertainty, employers are, too. Shifts in fiscal, geopolitical, and trade policies may have made employers more risk averse, slowing hiring in 2025 and potentially continuing to impact growth in 2026. When businesses cannot confidently forecast costs, demand, or other economic conditions, they are less likely to expand or make new investments.
Taken together, these trends point to a labor market that remains relatively strong but is no longer delivering the same gains for workers as it did in the years immediately following the COVID-19 pandemic. Hiring has slowed, more workers are seeking jobs, and wage growth has not kept pace with rising costs. For households, that combination means less purchasing power and more difficulty planning for the future. For employers, it reflects a more cautious environment shaped by economic uncertainty. These trends will be important to watch as New Hampshire’s economy continues to evolve, particularly as policymakers and communities consider how to support workers and sustain economic stability.
Ben Reynolds is a senior policy analyst at the New Hampshire Fiscal Policy Institute, a nonpartisan, independent research nonprofit that examines issues related to the state budget, the economy, health care, housing, and more. Read NHFPI’s full analysis, “New Hampshire’s Labor Market Slowed in 2025,” at nhfpi.org.