"Money is flowing in and out of the economy at a healthy clip, but it's not going toward creating a new job for you. Instead, all eyes are on artificial intelligence, investment in which drove much of the year's economic growth, along with still-strong consumer spending.The big AI investors were larger companies, including those that have led white-collar job cuts. In some cases, their profits have skyrocketed, and "do more with less" has been the mantra of the year."
"As KPMG's chief economist Diane Swonk wrote on Tuesday, "Growth and labor market outcomes have decoupled." "Firms are doing more with fewer workers," Swonk wrote. "Many overshot on staffing during the hiring frenzy and are now using attrition or layoffs to bring staffing levels more in line with demand. Others are offsetting the squeeze on profit margins due to tariffs with layoffs and hiring freezes.""
US GDP growth has been robust, powered largely by AI investment and solid consumer spending while hiring remains weak. The labor market has decoupled from growth, producing a "jobless boom" and the highest unemployment rate since 2021. Large firms and Big Tech drove AI spending even as many implemented white-collar layoffs, hiring freezes, and attrition to reduce staffing. Corporate profits rose for major AI investors, allowing firms to do more with fewer workers. Spending on essentials sustained demand. Overall layoffs remain relatively low but are concentrated in Corporate America and Big Tech, complicating labor-market recovery.
Read at Business Insider
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