In late 2025, the U.S. finds itself in a rare economic conundrum: robust growth approaching 4 percent, but little momentum in jobs creation. Economists are scrambling for explanations as this disconnect hasn’t been seen in decades.
Companies are pouring money into capital expenditure—especially in technology—pushing growth. Meanwhile, overall hiring has slowed dramatically: recent averages show only ~29,000 new jobs per month, down sharply from ~82,000 in the same months of 2024.
Two interpretations dominate the debate:
- Tech-led productivity surge
The optimism camp argues that artificial intelligence and automation are allowing firms to scale output without needing as many workers. In this view, growth is real, but its benefits are decoupling from traditional hiring patterns. - Cautious business behavior
The more skeptical perspective warns that the disconnect might signal weakness or uncertainty. Firms could be holding back on hiring even as they invest, either waiting for clearer signals or unsure of sustained demand.
Complicating the picture further, some parts of the labor market—especially outside tech—are showing signs of stall. A six-month “core” jobs measure (excluding government and healthcare) has been nearly flat. Historically, such flattening has preceded slower growth or recession.
Investors, for their part, seem undeterred. The stock market has surged thanks to heavy gains in big tech names. The anticipation is that the Federal Reserve, worried by the weak labor data, will further ease policy to support the economy.
Whether this “growth without jobs” moment becomes a sustained new normal or a warning sign remains to be seen.
