Employers are expected to increase salaries by an average of 3.4% in 2026, similar to this year’s raises, due to economic uncertainty affecting hiring decisions.

Companies are reallocating funds, scaling back hiring, and focusing on internal investments, with some planning to add skill-building initiatives for employees.

US employers are planning for a 3.5% pay increase in 2026, down from 3.6% in 2025, as economic concerns drive compensation decisions.

Inflation is rising, with food and electricity prices higher, while tariffs impact clothing and furniture costs, affecting workers’ purchasing power.

The job market is cooling, with fewer job openings and higher unemployment rates, leading workers to hunker down in their current positions.

Wage growth for job stayers is now outpacing that of job switchers, as fewer job openings limit pay increases for those seeking new opportunities.

Job seekers are losing leverage in negotiations, as inflation outpaces wage growth, impacting workers’ ability to keep up with rising costs.

Read more at Yahoo Finance: Pay raises will be stagnant in 2026 as companies ‘reorient’ to economic uncertainty