Goldman economists on the Gen Z hiring nightmare: ‘Jobless growth’ is probably the new normal — from fortune.com by Nick Lichtenberg (this article is behind a paywall)
The challenging U.S. labor market is entering a new normal, according to Goldman Sachs economists David Mericle and Pierfrancesco Mei, who tackled the phenomenon of “jobless growth” in an Oct. 13 note. It resonates with what Federal Reserve Chair Jerome Powell memorably described in September as a “low-hire, low-fire” labor market, in which, for some reason, “kids coming out of college and younger people, minorities, are having a hard time finding jobs.”
Some analysts blame the downturn in entry-level hiring on the impact of AI on the economy, others on macroeconomic uncertainty, especially the seesawing tariffs regime from the Trump administration. The takeaway is clear, though, that getting hired is really hard in the mid-2020s.
This shift is clear in data collated by the investment bank. Payroll growth by industry shows almost all sectors outside health care posting weak, zero, or even negative net job creation, despite otherwise solid macroeconomic indicators. Meanwhile, the share of executives who mention both AI and employment in the same context on earnings calls has reached historic highs.?
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For now, Mericle’s “low-hire, low-fire” diagnosis serves as both warning and guide: Jobless growth may not mean mass layoffs, but it does mean fewer opportunities for job seekers and slower rebounds from economic shocks in the years to come.?