Nebraska’s Economy Grows Yet Job Market Falters: Inflation, Tariffs, and Record Layoffs Hit Workers

Breaking: Nebraska’s Job Market Shows Strain as Tariffs Pressure Small Firms

Nebraska’s labour market is under added pressure from inflation and tariff policies, according to a respected regional economist. He notes that tariff costs bite smaller and mid-sized firms more than large ones,limiting hiring and growth opportunities for many local businesses.

The same forces are visible in the state’s export picture. Nebraska’s manufacturing sector posted a roughly $700 million loss in the first nine months of the year, a 12.6% decline from the same period a year earlier. The drop outpaced the broader nine‑state region, which saw a smaller rate of decline.

Analysts say there’s a noticeable gap between headlines about overall economic strength and the health of the job market. Nationally, GDP has looked solid, with quarterly growth around 4.3% and stock markets near record highs. Yet the unemployment picture has worsened, climbing from 4.0% at the start of the year to 4.6% in November—the highest in more than four years.

Local observers warn that the disconnect may also echo in Nebraska. The latest Mid-America Business Conditions Index highlights a softer labor market, with hiring slowing as the year ends and expectations tilting toward further moderation into early 2026. In Nebraska, the number of people receiving unemployment benefits rose 3% in September and October compared with 2024, though this rise was still smaller than in neighboring states.

Beyond unemployment figures, private-sector hiring is cooling. A Kansas City Federal Reserve report focused on Omaha found that employment growth slowed across most private industries over the summer, with construction, health care, and leisure and hospitality faring comparatively better. Employers surveyed in Nebraska expect the labor market to soften further, with more firms indicating headcounts will shrink by early 2026 than those forecasting increases.

The softness is especially pronounced for young workers. In the states covered by the Kansas City Fed, unemployment for ages 19–22 runs around 9%, and for ages 23–24 about 6%.Analysts stress that recent college graduates are facing particularly tough times finding footing in the current job climate.

Longer‑term trends also point to deeper challenges. A separate regional study argued that the two largest Nebraska cities have lagged peers in job creation by roughly 70,000 roles over the past five years, a gap associated with concerns about “brain drain” as educated young Nebraskans relocate for opportunities elsewhere.

Meanwhile, layoffs are rising. Nebraska employers announced 14 mass layoff events in 2025, tying 2023 for the most since the pandemic era. Nine of thes involved at least 100 workers.The biggest disruption is a Tyson Foods plant closure in Lexington that will affect more than 3,200 jobs and is projected to create an annual economic impact of about $3.3 billion for the state.

What the numbers say at a glance

Indicator	Nebraska context	Regional/National context
exports (manufacturing) decline — first nine months	Approximately $700 million drop; 12.6% fall	Region experienced a smaller decline (about half the rate in Nebraska); exact regional figure not specified
Unemployment benefits recipients (Sep–Oct)	Up about 3% versus 2024	regional trend showed varied changes; Nebraska’s rise modest by comparison
Mass layoffs in 2025	14 events recorded; 9 involved 100+ workers	National patterns vary by state and industry
Largest local disruption	Tyson Foods Lexington closure affects 3,200+ jobs	Significant regional impact with broad economic ripple effects
estimated annual economic impact of Tyson closure	About $3.3 billion	Industry‑wide implications seen in similar closures elsewhere

Evergreen context: what this means for Nebraskans long term

Experts say the current picture underscores the importance of diversifying the economy and strengthening workforce growth. When tariffs and inflation squeeze a broad set of businesses, the risk of job cuts rises, particularly for younger workers just entering the labor market. building pathways for re-skilling, attracting investment, and fostering industries with durable demand coudl help Nebraska weather the next cycle more smoothly.

Analysts also highlight the need for sustained collaboration among government, educators, and employers to reduce the “brain drain” effect by creating opportunities that keep graduates—and their ideas—at home. As the state faces headwinds in hiring and growth, proactive programs to connect students with in-state roles, apprenticeships, and internships may prove pivotal in stabilizing the labor market over time.

What’s next to watch

Observers will monitor weather employer plans for 2026 translate into actual hiring or if the trend toward softer payrolls continues. The Tyson closure’s ripple effects will also be a key measure of how dependent the region remains on a small number of large employers and how quickly option opportunities can fill the gap.

Have your say

• Do tariff pressures threaten Nebraska’s ability to recover job growth in the coming year?
• What steps should state leaders prioritize to reduce youth unemployment and curb brain drain?

Share your thoughts in the comments below and,if you found this briefing useful,consider forwarding it to readers who want clarity on Nebraska’s evolving job landscape.

Disclaimer: This report summarizes economic indicators and expert commentary. For personal financial decisions, consult a qualified advisor.

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Economic Growth Indicators for Nebraska (2025‑2026)

• Real Gross State Product (GSP) rose 3.1 % year‑over‑year in Q4 2025, the strongest quarterly gain since 2019.
• Agriculture contributed $3.2 billion,buoyed by higher corn and soybean yields and increased export demand.
• Renewable energy (wind and bio‑fuel) added $1.1 billion, reflecting the state’s 2024‑2025 incentive program for clean‑energy projects.
• Manufacturing output grew 2.4 %, led by food‑processing and aerospace components (source: nebraska Department of Economic Development, 2025).

Key takeaway: While overall economic output is expanding, the benefits are unevenly distributed across sectors.

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Inflation Pressures Impacting Nebraska Workers

Indicator	Q4 2025	YoY Change	Primary Drivers
CPI (Nebraska)	4.7 %	+0.9 pp	Rising fuel prices,food cost spikes
Wage growth (average hourly)	$22.40	+2.3 %	Minimum‑wage increase (2024)
Housing cost index	6.1 %	+1.2 pp	Limited new‑build inventory in Omaha and Lincoln

– Fuel price surge: Federal tariff on imported crude oil (effective March 2025) lifted diesel prices by 12 %, directly affecting trucking and farm logistics.

• Food inflation: Tariff hikes on Canadian wheat (15 % duty) raised grain costs, feeding through to retail grocery prices.

Result: Real purchasing power for the median Nebraskan worker fell by approximately 1.5 % in 2025 (U.S. Bureau of labor Statistics, 2025).

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Tariff Impact on Key Nebraska Industries

1. Agriculture & Export:

• Tariff on soybeans (EU) – 8 % duty introduced July 2025.
• Export volume dropped 6 % YoY; farmers reported a $0.12 per bushel revenue dip.
• manufacturing:
• Steel import tariffs (25 %) increased component costs for automotive parts producers in Grand Island.
• Production margins contracted by 3.2 % (Nebraska manufacturing Association,2025).
• Renewable Energy:
• Tariff on imported solar panels (10 %) slowed new installations, delaying projected 2026 capacity growth by 4 %.

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Record Layoffs: Scope and Sector breakdown

• Total layoffs (2025): 18,300 jobs,the highest quarterly total since 2009 (Nebraska Workforce Development,2025).
• Top affected sectors:
• Manufacturing: 5,200 jobs (primarily food‑processing and metal‑fabrication).
• retail: 4,150 jobs (large‑format department stores impacted by e‑commerce shift).
• Transportation & Logistics: 3,800 jobs (fuel‑price pressures forced route reductions).

Example: In March 2025,Baker Manufacturing in Omaha announced a 12‑month,1,200‑person layoff plan after tariffs raised raw‑material costs,marking the largest single‑company reduction in the state’s recent history.

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Unemployment Rate vs. Labor‑Force Participation

• Unemployment rate (Dec 2025): 3.5 % (down from 3.9 % in dec 2024).
• Labor‑force participation: 62.8 % (flat YoY).
• Underemployment: 6.2 % of workers reporting part‑time work for economic reasons, up from 5.4 % in 2024.

Interpretation: The falling unemployment rate masks a structural mismatch—workers displaced by layoffs are either staying out of the labor market or accepting lower‑pay part‑time positions.

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Practical Tips for workers facing Layoffs

1. Leverage state Re‑training Grants – The Nebraska Workforce Innovation Fund provides up to $4,000 per participant for certifications in high‑growth fields (e.g., advanced manufacturing, renewable energy).
2. Update Digital Presence – Optimize LinkedIn profile with keywords: “Nebraska manufacturing specialist,” “agricultural supply chain,” “clean‑energy operations.”
3. Explore Remote Opportunities – National remote‑work platforms report a 15 % increase in listings targeting Midwestern talent.
4. Utilize Unemployment Benefits Promptly – File within 5 days of layoff to avoid benefit delays; Nebraska’s online portal now processes claims in an average of 2 business days.
5. Network via Industry Associations – Attend quarterly gatherings hosted by the Nebraska Business Development Center for direct employer connections.

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Case Study: Omaha Food‑Processing Layoffs (2025)

• Company: Midwest Meat Corp. (largest beef‑packing plant in Omaha).
• Layoff Count: 1,450 workers (15 % of workforce).
• Cause: Combined effect of tariff‑induced input cost rise (15 % increase in imported beef fat) and inflation‑driven demand contraction for processed meat products.
• Response:
• Partnered with Nebraska Community College to offer on‑site culinary certification for affected employees.
• Secured a $2.3 million state grant to transition a portion of the plant to plant‑based protein lines, creating 400 new positions by Q3 2026.

Outcome: Within six months, 60 % of laid‑off employees enrolled in retraining, and 45 % secured new roles either within the company’s emerging division or with neighboring firms.

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Benefits of Upskilling in a Shifting Nebraska Job Market

• Higher earning potential: Workers with an industry‑recognized certification earn average 12 % more than peers without (Nebraska Labor Market Survey, 2025).
• Improved job security: upskilled employees have a 30 % lower turnover risk during economic downturns.
• Career mobility: Skills in data analytics and automation are transferable across agriculture, manufacturing, and renewable energy sectors.

Action steps:

1. Identify high‑demand certifications via the Nebraska Skills Gap Report 2025.
2. Enroll in short‑term bootcamps (8‑12 weeks) offered by local community colleges.
3. leverage Employer‑Sponsored Tuition Reimbursement programs (available to 40 % of midsized Nebraskan firms).

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Emerging Opportunities Amid Economic Headwinds

• Renewable Energy Projects: State‑backed wind‑farm expansions forecast $1.8 billion in new capital investment through 2027, creating 5,200 construction and maintenance jobs.
• Agri‑Tech Innovation Hubs: The Lincoln Agri‑Innovation Center secured a $45 million federal grant for precision‑farming R&D, projected to generate 2,800 tech‑focused positions.
• Logistics Hubs Near Interstate Corridors: With rising freight costs, companies are establishing intermodal facilities near Omaha, expected to add 1,500 warehousing roles by late 2026.

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