Job Market Woes: The Hidden Struggle Behind the Numbers

The job market is in a slump, and it's not just a minor hiccup. Experts are sounding the alarm, pointing out that the current situation is the weakest since 2011. This is a big deal because, for years, a strong economy meant plenty of jobs. But now, even though the economy is growing, jobs aren't keeping up.

Companies Doing More with Fewer People

One big reason for this is that companies are finding ways to do more with fewer people. They're using technology and smarter processes to get the job done without hiring more staff. This might sound efficient, but it's not great for job seekers, especially those just starting out.

The Numbers Tell a Stark Story

The numbers tell a stark story. Over the past six months, the average job growth has been a measly 17,000 per month. That's the slowest pace since the global financial crisis. Even private payrolls, which usually fare better, are at their weakest in over a decade. And the underemployment rate has climbed to 8.7%, the highest since 2017.

Investors vs. Experts

But here's the weird part: despite all these red flags, investors are still betting big on a strong economy in 2026. They're looking at tight credit spreads and record-high stocks and seeing a bright future. But experts warn that this optimism might be misplaced. A strong economy can't last without job growth.

The K-Shaped Economy

Take the third quarter GDP growth, for example. It was an impressive 4.3% annual rate, driven by a surge in consumer spending and a big jump in corporate profits. But here's the catch: real disposable income was flat. That means households didn't actually gain purchasing power. They're relying on savings, credit, and cutting costs to keep spending.

This situation paints a picture of a K-shaped economy, where the wealthy are thriving while lower- and middle-income families are struggling. Companies have learned to grow without hiring, squeezing more output from their current teams. This might be good for profits, but it's not doing any favors for job seekers.

The Threat of "Jobless Growth"

Goldman Sachs economists have even warned about the prospect of "jobless growth." They point out that outside of healthcare, net job creation has been weak or even negative in many sectors. Executives are increasingly focused on using AI to reduce labor costs, which could be a long-lasting challenge for the job market.

Demographics and the Labor Supply

Demographics are also playing a role. The number of families with children under 18 has been declining, reflecting lower birth rates and an aging population. This could limit the labor supply in the years ahead.

The Fragile State of the Job Market

In the end, experts aren't predicting mass unemployment, but they're not seeing an easy path back to the old days of strong GDP meaning plenty of new jobs. The full consequences of AI on the labor market might not even become apparent until a recession hits. So, while the job market might not be in free fall, it's definitely in a fragile state.