Source: Fortune
Summary
According to Bank of America Research, the economy is experiencing a “sea change” with companies prioritizing productivity over hiring. Analysts predict another year of GDP growth without significant job creation, with the workforce expected to remain flat due to an aging native-born population and reduced immigration. Oxford Economics’ Michael Pearce forecasts 2.8% GDP growth, driven by improved productivity, while AI adoption is expected to boost productivity and potentially weigh on payrolls.
Our Reading
The numbers tell one story.
Bank of America Research predicted a “sea change” in the economy, and now analysts see another year of growth without new jobs. Oxford Economics’ Michael Pearce expects GDP to expand by 2.8%, driven by productivity gains. AI adoption is expected to play a bigger role in boosting productivity, but may put downward pressure on jobs growth. The labor participation rate among the native-born population remains in a downtrend, and the Labor Department lowered its reading on 2025 job gains. The economy is vulnerable to shocks, with the labor market being the main firewall against a recession.
This is what a low-hire, low-fire labor market looks like.
Author: Evan Null
