Welcome to the ‘Jobless Growth’ Economy

America is entering an era of “jobless growth,†according to analysts at Goldman Sachs. That’s not ideal for those of us who are job-reliant. It’s especially not great for those who don’t currently have a job, whether they have been on the market for a while or are fresh out of college and looking to get their start. But hey, at least the capital holders will still get all that growth without those pesky payroll costs!

The memo, written by economists David Mericle and Pierfrancesco Mei and spotted by Fortune, warns that the current market of “modest job growth alongside robust GDP growth†is likely the new normal going forward. Most of that “robust†GDP growth will come from businesses adopting artificial intelligence, according to the analysts, with “only a modest contribution from labor supply growth due to population aging and lower immigration.â€

Of course, there are still plenty of people entering the job market, but they’re having a rough go of things. Thus far, there has been limited evidence to suggest that, despite the hype, AI has actually displaced many workers. In fact, it’s likely that Trump administration policies, including tariffs, have had more of a chilling effect on hiring broadly. But there are signs that the adoption of the technology is slowing hiring, especially for entry-level positions. Job postings for those roles are way down from last year, so while people aren’t necessarily being pushed out of existing positions, the market has pulled up the ladder for people trying to get in on the lower rungs.

That doesn’t just suck, but is extremely short-sighted. The thing about senior roles is that you need people with experience to fill them. If the entire economy is just cutting off the pipeline for developing people who are eventually capable of filling those roles, there’s going to be a bigger problem down the road when those who fill senior roles move on or age out. You don’t get senior staff without first having junior staff, but maybe all these companies are just betting that AI will continue to improve to the point where they don’t need to bother with humans at all.

So things are bad now, but the economists say we really don’t understand just how bad it is yet. “History also suggests that the full consequences of AI for the labor market might not become apparent until a recession hits,†they wrote. Per Deutsche Bank researchers, the only thing currently keeping the American economy out of a recession is AI-related spending, which, according to Harvard economist Jason Furman, accounted for 92% of GDP growth in the first half of 2025.

Massive amounts of money are flowing into AI investments, with the promise that there is huge potential for productivity boosts through both enterprise and consumer adoption of AI tools. That hasn’t materialized even a little thus far, but the idea that it will has severely messed up the job market. One thing is for sure: AI is going to be transformative for the economy. Whether that comes in the form of productivity gains or a complete and total collapse of markets that are wildly overleveraged on AI bets that drag us into a 2008-style recession, well, we’ll have to see.