Economic Challenges Impacting Nebraska’s Job Market
The job market in Nebraska is facing a complex set of challenges, influenced by various economic factors such as inflation and tariffs. These issues are particularly pressing for smaller and medium-sized businesses, according to Ernie Goss, an economics professor at Creighton University.
Goss highlights that tariffs have a disproportionate effect on smaller enterprises compared to larger companies, as the former struggle more with absorbing the increased costs from import tariffs, especially those related to countries like China.
Manufacturing exports in Nebraska have been notably affected, with a significant drop of 12.6% in the first nine months of the year, as identified by the December Mid-America Business Conditions Index. This decline is more than double the average decrease observed in the nine-state region covered by the index.
Despite strong indicators of economic health, such as near-record highs in the stock market, rising corporate profits, and a 4.3% growth in the gross domestic product during the third quarter, the labor market presents a less optimistic picture. The national unemployment rate has increased from 4% at the start of the year to 4.6% in November, marking the highest rate in over four years.
Goss observes a significant “divergence” between economic growth as measured by GDP and employment figures. This disparity is also evident in Nebraska, where unemployment compensation claims rose by 3% in September and October compared to the previous year.
The situation seems more severe in neighboring states, with South Dakota, Kansas, and Missouri experiencing even higher increases in unemployment claims.
While Nebraska has seen record employment numbers, hiring is decelerating. A report from the Omaha branch of the Federal Reserve Bank of Kansas City found that employment growth slowed across most industries over the summer, with only construction, healthcare, and leisure and hospitality sectors showing resilience.
Expectations for the labor market are bleak, with many Nebraska firms anticipating a reduction in workforce numbers by early 2026. This slowdown in hiring is particularly problematic for younger workers. The unemployment rate for individuals aged 19-22 in the region is 9%, while those aged 23-24 face a 6% unemployment rate.
Goss notes that “college graduates are having an especially tough time right now.” The Aksarben Foundation’s September report underscores this issue, revealing that job creation in Nebraska’s largest cities trails behind other regions by nearly 70,000 jobs over the past five years. This stagnation is partly due to “brain drain,” where young, educated individuals leave the state for better opportunities elsewhere.
Moreover, layoffs are becoming more frequent. In 2025, Nebraska experienced 14 mass layoffs, equaling the number in 2023 and marking the most since the pandemic. Nine of these layoffs affected at least 100 employees each. The closure of the Tyson Foods plant in Lexington alone will result in over 3,200 job losses and is expected to have a $3.3 billion annual economic impact, as reported by the University of Nebraska-Lincoln’s Center for Agricultural Profitability.
