"I spent most of 2025 writing about America's growing jobs problem, and how we are in a complex state of affairs where we are outperforming our peers as the economy is being powered by the consumer spending of America's most well-off citizens, gargantuan AI investment propping up the stock market and creating additional consumer spending through the stock market's wealth effect, as well as widespread wage growth outpacing inflation."
"Everyone in this never-ending fight around the economy has firm data-based ground to stand on, and all of us with traditional economic or finance training who have had the certainty beaten out of us are pulling our hair out watching people without that training claim to be dead-certain as to what a bunch of complex and conflicting economic data says."
The Bureau of Labor Statistics released final 2025 jobs data showing a 4.4% unemployment rate while hiring largely stalled after April. The labor market produced weak hiring across 2025 despite wage growth averaging about 0.8% above inflation for the year. The economy has been supported unevenly by consumer spending concentrated among wealthier households and massive AI investment that has buoyed the stock market and generated additional consumption via the wealth effect. Traditional indicators and surveys diverge: objective data show resilience in some measures, while sentiment gauges suggest public economic perceptions are very negative. The disconnect indicates a serious, measurable problem beyond mere perception.
Read at Jezebel
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