Healthcare Jobs Are Quietly Holding Up the U.S. Labor Market
For much of the past year, healthcare has acted as an unsung stabilizer in the U.S. labor market. While employers in technology, finance, government, and transportation pulled back on hiring—or cut jobs outright—healthcare continued to add workers. In January, that dynamic became impossible to ignore.
Nearly all of the 130,000 jobs added to the U.S. economy last month were in healthcare or healthcare-adjacent roles. Construction and manufacturing also posted gains, but those were overshadowed by healthcare’s sheer dominance. Meanwhile, employment declined across government, finance, information, and transportation and warehousing.
Healthcare is now “way outperforming most of the rest of the economy,” said Laura Ullrich, director of economic research at Indeed.
That strength reflects a deeper shift in the labor market—one increasingly shaped by the physical, hands-on work required to care for an aging population.
A Strong but Narrow Engine of Growth
Job growth is generally good news for the economy. But economists caution that relying so heavily on a single industry carries risks. If healthcare hiring slows, there may be few other sectors ready to pick up the slack. And not everyone has the skills—or the desire—to work in healthcare.
Still, some economists see mitigating factors. Healthcare jobs are geographically dispersed and relatively insulated from economic cycles, unlike industries such as manufacturing or technology.
“It would be a bigger risk if a very geographically concentrated sector were driving growth,” said Jed Kolko, senior fellow at the Peterson Institute for International Economics.
Immigration’s Critical Role in Healthcare and Construction
Both healthcare and construction have become increasingly dependent on immigrant labor. The U.S. has long relied on foreign-born physicians to staff rural hospitals, but immigrants are now deeply embedded across the healthcare skill spectrum.
Although foreign-born workers make up less than 15% of the U.S. population, they account for:
39% of home health aides
28% of physicians
24% of dentists
Construction shows a similar pattern. Roughly one-quarter of all construction workers are foreign-born, but in certain specialties the share is far higher—around half of drywall installers and roofers, and nearly 40% of general laborers.
That dependence has created a tension. As immigration restrictions tighten and deportations increase, labor shortages are emerging.
“You just don’t have the access to the labor that you normally have,” said Joe Brusuelas, chief economist at RSM. The result: higher construction costs, slower projects, and increased pressure on housing supply.
A Hiring Frenzy in Healthcare
In healthcare, demand is so intense that employers are competing aggressively for workers. Nurses and nurse practitioners are receiving five-figure signing bonuses, generous paid time off, and multiple job offers.
“It’s a race to the finish line,” said Sari Gillen, a healthcare recruiter in Houston, noting that candidates often juggle several offers at once.
The work is demanding, but healthcare jobs are difficult to automate and offer relative stability—qualities that are increasingly attractive in today’s labor market.
Younger Workers See Opportunity
For some younger workers, healthcare offers a rare combination of high pay and job security. Registered nurses in California, for example, often earn $70 or more per hour.
Savannah Grant, a 28-year-old emergency department technician in Sacramento, recently earned her nursing degree and is optimistic about her prospects. The pay, she said, could help her manage $100,000 in student debt and still afford to travel.
“It can definitely provide for you and your family,” she said.
The Demographic Reality
Nowhere is demand more visible than in rural healthcare systems. Ballad Health, which serves parts of Appalachia, is currently trying to fill 500 nursing positions as more patients age into Medicare.
In just six months, patient visits at Ballad hospitals rose 7% year over year. “It creates a huge demand for labor,” said CEO Alan Levine.
Some economists are unconcerned about healthcare’s growing dominance in job creation. “Old people are not going away,” said Guy Berger of the Burning Glass Institute.
What’s Missing: Growth Elsewhere
Healthcare has long been a reliable source of jobs, but until recently, it wasn’t alone. After the pandemic, industries like travel, dining, tech, and finance expanded rapidly. Low interest rates fueled hiring in professional services and information-sector roles such as software development.
That momentum has faded. Over the past year, employment in professional and business services, finance, retail, and information has declined. Federal government payrolls have also fallen sharply.
“I worry that the rest of the economy is shrinking,” said University of Michigan economist Justin Wolfers.
For now, healthcare is bearing the brunt of the labor market. The question is how long it can do so on its own.