“Always the bridesmaid, never the bride” is an apt characterization of Bess Flowers’ career in Hollywood. The actress frequently shared the screen with heavyweights like Joan Crawford, Bette Davis, and Lana Turner, but never became a household name. Known as the “Queen of Hollywood Extras,” Flowers starred in 23 Best Picture nominees and 5 winners, records that stand to this day. Many of her roles went uncredited, but astute observers can see her in classics like All About Eve, Gone with the Wind, and White Christmas. She was also frequently used by Alfred Hitchcock, who called her up any time he needed someone to play an elegant party guest. Success in Hollywood came quickly for Flowers, who ran away from her hometown of Sherman, Texas and landed the first gig she interviewed for. According to The Hollywood Reporter, when she first started out, “extras” were only compensated with a boxed lunch and a couple dollars per day. This led Flowers to help form the “Screen Extras Guild,” which worked to achieve better pay and working conditions for performers in bit parts.
Flowers was a workhouse, starring in more than 350 feature films over 4 decades. While her career never lost momentum, the same can’t be said for the current labor market. Despite a surprise one-tenth decline in the unemployment rate to 4.4% in December’s jobs report (helped by a declining labor force participation rate, but more on that later), the headline gain of 50,000 stopped short of the 73,000 consensus and was more than offset by the combined -76,000 in revisions to October and November. As we noted in Saturday’s Intelligence Briefing, core private payrolls (excluding lower-productivity, recession-proof Education and Healthcare), fell over the last three quarters of 2025. In looking at data back to 1967, quarters where core payrolls fell while Education and Healthcare rose are the sole preserve of recession.
One of QI’s many mantras is “hours before bodies,” and total private aggregate hours worked stalled to close out 2025. On a quarter-over-quarter (QoQ) annualized basis, they were a flat 0.0% in 2025’s third quarter but ticked up 0.5% in the fourth quarter (red bars). This said, there was marked deterioration through year-end, as December’s monthly value was 0.2% below the fourth quarter average. Negative QoQ changes to hours worked scream recession onset—see past cycles’ first forays into the red: 2007’s third quarter -0.1% preceding the Great Financial Crisis and the fourth quarter of 2019’s -0.1% print preceding the “recession that wasn’t” ahead of the pandemic. In other words, not exactly an encouraging sign for a labor market that’s already seen hiring grind to a halt.
An alternative view of the hours worked picture is the total private workweek, which fell one-tenth to a meager 34.2 hours in December (yellow line). The 34.3-threshold (red dashed line) is typically the “floor” during expansions; it didn’t violate that level at any point during the 2010s recovery. Meanwhile, March 2024 was the last time the workweek was north of that threshold. Not only are workers working less in aggregate, but participation in the labor force also continues to deteriorate (teal line). After a collapse during the COVID shutdown, the participation rate trudged upwards and peaked at 62.781% in August 2023, beneath its pre-pandemic levels. Since then, it’s headed in the opposite direction as more frustrated workers tap out entirely, slipping to December’s 62.404%.
While not pictured, when breaking out the participation rate by education, those with less education (high school or below) have seen participation recover or even exceed pre-pandemic levels. The opposite is true for those with some college or at least a bachelor’s degree, indicative of the structural challenges impairing the white-collar job market. The University of Michigan’s (UMich) first consumer survey release for 2026 noted that “expectations for higher-educated and higher-income consumers have recently been worse than for their lower-educated, lower-income counterparts… January’s readings for the expected probability of losing one’s own job are less favorable among college-educated consumers than for consumers without a bachelor’s degree, a pattern seen for much of the past year. This is a clear reversal from the period between 2021 and 2024, when job loss expectations were much more favorable for college graduates than for less-educated consumers.”
Also clear in the latest UMich release was a deepening of consumers’ financial duress. The share of respondents describing their finances as in “Continuous Decline” (both worse off today vs. a year ago and expecting things to be worse in 12 months’ time), rose one-tenth to 28%, a fifth straight month north of 25% (green bars). In data to 1978, current levels have no historical precedent and are more than triple the 8% long-run average. Consumers’ assessments of their Current Finances Based on Income, Debts, and Assets were similarly dour. January’s net -6% has only been matched in the early 1990s and the GFC (blue line). There’s also a major holidays; hangover in the form of $20 billion in shopping done through “Buy Now Pay Later.” According to Adobe, this was a record and nearly 10% increase from the year prior.
All of this points to clear downside risk for consumer spending to kick off the new year. While the top 10% have kept swiping their cards, we enter 2026 with UMich Upper-Income Consumer Sentiment at just 55.5, lower than the depths of the GFC and more than 30% below where it started 2025, at 81.3 (light blue line). Higher Unemployment Expectations also remain at historical highs (pink line), and show no sign of budging as labor market scarring continues. The share of long-term unemployed, those out of work for 27+ weeks, rose steadily from February 2023’s 17.8% to a cycle high 26.0% in December (purple line). The only precedents are June 1983, in the aftermath of the early 1980s double-dip recession, and the GFC, when the 26% threshold was first crossed in spring 2009. For those workers who find themselves on the wrong side of a pink slip, channeling Bess Flowers and taking a bit part “extra” gig may be their only option until conditions improve.