Picture this: Healthcare’s dominant role in the labor market

• Private healthcare accounted for more than half of all June-to-June employment gains in 2024. In 2025, health care gained 743,000 private jobs June-to-June; the rest of the economy lost 323,000 jobs.
• The recent pattern—overwhelming employment growth in healthcare, shrinking employment elsewhere—is not yet showing up in the CES monthly numbers. With the benchmark revisions, it will first show up in the January Employment Situation.
• Baby Boomers — those born between 1946 and 1964 — are largely driving healthcare spending. This group started turning 65 — the age most Americans qualify for Medicare — in 2010. The number turning 65 has been steadily increasing since; it will peak in 2026, reflecting a 1961 peak in births.
• More than half of the employment gains in healthcare can be directly tied to North American Industry Classification System (NAICS) categories associated with older people, including services for the elderly and persons with disabilities (NAICS 624120), which increased by 306,264.

Healthcare spending on older people is largely insulated from the forces that drive cyclical and secular growth. When the Fed raises interest rates, or when immigrants (who are mostly too young to qualify for Medicare) are deported, employment outside of healthcare contracts — health care employment keeps on expanding. The bottom line: outside of healthcare, the labor market is shrinking. This may continue for another year.

This article was published by S&P Global Market Intelligence and not by S&P Global Ratings, which is a separately managed division of S&P Global.