The economy overall is in relatively good shape, but the labor market isn't, according to Brian Gottlob.
Gottlob is the director of New Hampshire Employment Security's Economic and Labor Market Bureau and principal of PolEcon Research, a Dover-based economic research company. He presented his annual economic forecast last week at an event presented by the Greater Dover Chamber of Commerce.
Gottlob said it's "almost impossible" to discuss the economy without "having some sort of political motive ascribed to it," adding he's "not a political person."
Gottlob did not mention President Donald Trump by name during his presentation. However, Trump's policies were prominent in Gottlob's remarks. Gottlob said when talking about the economy, "and some of the political choices that are affecting it, (it's) not from a political perspective, but from an economic perspective."
Fewer job postings in New Hampshire
Gottlob said it's a "very difficult" time to seek work as there's been a downturn in jobs in New Hampshire. The good news is there haven't been a lot of layoffs, Gottlob said. The U.S. economy has been growing at a "decent" pace, but there is minimal to no job growth, he said. The amount of job postings "has fallen pretty significantly" since the summer, he added. Jobs in high demand in the state and nationally are in healthcare, said Gottlob.
Job postings are still "relatively high" when compared to before the COVID-19 pandemic, he said. He raised the question of how much the weak job growth is connected to the lack of demand and what part of it is related to the "mismatch between what is required in the job skills that are needed and what is available in the labor force."
He said he thinks there's currently a significant "mismatch" in the labor market due to artificial intelligence affecting jobs, and it will take time to "adjust."
Gottlob said he thinks the economy is going to be stronger in 2026, but job growth will stay feeble, especially in the first half of the year. He said the "key" to that outlook holding true is that layoffs have to stay minimal. Additionally, lower interest rates will aid consumer spending and investments for businesses, he said. Gottlob said a large reason why the economy will grow is because tax cuts will take effect. He said they are deficit-financed tax cuts, which he called a negative, but the positive side is people will have more money and tax refunds will be bigger.
Low consumer confidence
Consumers are not very confident, said Gottlob, a trend since the COVID-19 pandemic. People do continue to spend, but it's progressively being supported by a smaller pool of households with higher income, Gottlob said, adding that is a concern.
Consumers are spending more than they were a year ago, said Gottlob. He said as long as that trend remains, "it's really difficult to see a significant downturn in the economy."
He said the "key to forecast" a recession can be dodged is no increase in layoffs, and as long as there aren't big declines in income, there won't be big drops in spending.
Low consumer confidence tracks to affordability, Gottlob added. He presented a chart depicting how prices have gone up since last year for essential expenses such as electricity, exceeding the Federal Reserve's inflation target.
Gottlob said very high housing costs are a problem, in addition to related expenses with home ownership, such as the increased electricity rates.
Fewer Canadians visiting New England
Based on the first 10 months of 2025, New Hampshire exports to Canada dropped about 30%, according to Gottlob. A big industry in the state is aerospace products, and overall, the exports aren't down too much, said Gottlob. They're going to different places, he said.
Gottlob said what's "problematic" for the hospitality industry is a decline of 30% or more of visitors from Canada. Data on visitors from Quebec indicates there were times during the summer when the decline reached 50%.
"This is problematic for our industries, hospitality industries in particular," said Gottlob.
Tariffs impacting small businesses, yet NH still desirable
Business optimism was pretty "fair" nationally, said Gottlob, referencing a National Federation of Independent Businesses survey. Optimism declined after the pandemic, said Gottlob, but jumped after the 2024 election as small businesses "love" a Republican administration, he said.
While businesses were optimistic in 2025, Liberation Day, (when Trump rolled out his tariffs) caused "a lot of consternation," said Gottlob. While he said he thinks things have bounced back a bit, small businesses especially "are feeling the pinch." He said he's spoken to local businesses, and input costs have "increased pretty significantly" and much of that relates to tariffs. Gottlob cited tariffs as a threat to the economy in 2025.
Gottlob said it's difficult to not "ascribe" some of the challenges the economy is facing to tariffs and "severe restrictions" on immigration. He said the foreign-born labor force has been shrinking nationally, causing problems for hiring in many industries, including for tech jobs in New Hampshire.
He said he "underestimated" economic growth and "overestimated" job growth in his forecast last year for 2025, but did say at that time the "greatest threats to prosperity" would be tariffs and immigration policy.
Gottlob said in conversations with individuals at the 2026 economic forecast event the "threat and problems tariffs have caused are very real for businesses in the state and across the country, including North Country Cider."
He noted job creation was greatly reduced after April, when tariffs were implemented. He attributed much of this related to a government jobs being "cut back," specifically in the federal government. The private sector is still adding jobs but has had slower growth, Gottlob said.
One of the most positive things about the Granite State is it's still a place where people want to start and run businesses, said Gottlob. He referenced new business creations over the past 12 months, and there's been a lot of new businesses after the pandemic. Comparison from 2023 to November 2025 depicted growth in the state with new businesses, higher than in other bordering states.
Midterm elections will be a factor
In 2026, Gottlob said he thinks inflation will be "stubborn." He said he doesn't think it will ramp up a lot, but also doesn't think it will decrease. Gottlob said he thinks it'll be about 3.2%, about 1% higher than what the Federal Reserve wants it to be.
He said he thinks retail sales will continue to "slip," but there will be more service sales. In terms of gross domestic product, Gottlob predicted it will be a better year, and people will have larger tax refunds.
Gottlob said he thinks the unemployment rate will increase and said he thinks artificial intelligence is having an "impact on demand," but said AI isn't the biggest factor.
With job growth, Gottlob said he thought last year the state would have about 1% job growth, and said if it's averaged out, it's probably around 0.5%.
"I think we'll be slower coming into 2026. I think the labor market's going to continue to be challenging, I think there's a good possibility in the first six months we'll actually see job losses," said Gottlob.
Gottlob said he does think the job market will improve and cited the November 2026 midterm elections as a driving force. He believes the impending election will cause "increasing pressure to relieve some of those pressures on prices."
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