Job growth in the Rocky Mountain region has slowed over the past year, with businesses signaling more stable employment levels for 2026, according to the latest analysis from the Federal Reserve Bank of Kansas City. The findings are based on recent Manufacturing and Services Surveys conducted across Colorado, Wyoming, and New Mexico.
Compared to previous years when many firms increased hiring to address overworked staff or meet growing demand, fewer businesses now plan to expand their workforce. In November 2025, about 30 percent of surveyed employers expected to add staff in the coming year, a decrease from nearly 50 percent at the end of 2024. At the same time, 31 percent anticipate reducing employment in 2026—up from just 12 percent last year. This shift reflects changing business conditions; while skill shortages previously drove hiring decisions, waning demand is now cited as a primary constraint.
Wage growth patterns have also changed. Businesses report less willingness to raise wages for new or existing employees compared with prior years. About one-third of firms plan to keep wages for new hires flat in the next year—a larger share than seen in both 2023 and 2024. Only 16 percent expect to implement wage increases for select job categories, down from nearly 30 percent in earlier surveys.
For current employees, roughly 29 percent of companies intend to maintain wage increases at rates similar to recent years, while others plan slower or no raises at all. Wage adjustments are increasingly tied to cost-of-living considerations rather than competition for talent.
Most firms have not actively reduced their workforce recently; instead, many have opted not to fill open positions when employees leave or have trimmed hours rather than laying off staff outright. Just 11 percent reported selective layoffs in the past three months.
The report notes that “labor markets in the Rocky Mountain region are currently marked by slowing, yet balanced, job growth and wage gains.” It adds: “On average, businesses anticipate keeping their workforce steady in the coming year.”
While passive headcount reductions have become more common and employment momentum has slowed heading into 2026 compared with last year’s outlooks, whether regional labor markets will remain resilient amid potential shocks remains uncertain.
The data were collected through ongoing surveys conducted by the Federal Reserve Bank of Kansas City (https://www.kansascityfed.org/research/regional-research/rocky-mountain-economist/businesses-in-the-rocky-mountains-report-steady-employment-outlooks-with-softer-wage-gains/).
“The views expressed are those of the authors and do not necessarily reflect the positions of the Federal Reserve Bank of Kansas City or the Federal Reserve System,” according to a statement accompanying the report.
