Economic Shift Toward AI-Driven Growth
America is entering a period of “jobless growth,” according to analysts at Goldman Sachs, where economic expansion continues without corresponding increases in employment. The phenomenon, detailed in a memo from economists David Mericle and Pierfrancesco Mei, suggests that current market conditions featuring modest job growth alongside robust GDP growth represent a new normal for the U.S. economy.
The report states that most economic growth will stem from businesses adopting artificial intelligence technologies, with “only a modest contribution from labor supply growth due to population aging and lower immigration.” This analysis, originally spotted by Fortune magazine, indicates fundamental structural changes in how economic value is created.
Entry-Level Job Market Contraction
Sources indicate that while AI hasn’t yet displaced significant numbers of existing workers, the technology is slowing hiring, particularly for entry-level positions. Job postings for these roles have declined substantially from last year, creating what analysts describe as a “ladder-pulling” effect for those attempting to enter the workforce.
“The thing about senior roles is that you need people with experience to fill them,” the report suggests. “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.” This pattern reflects what economists call a jobless recovery, where economic improvement doesn’t translate to employment gains.
Recession Risks and AI Dependency
According to the analysis, the full impact of AI on employment might not become apparent until an economic downturn occurs. Deutsche Bank researchers reportedly found that AI-related spending currently represents the primary factor keeping the American economy out of recession, accounting for what Harvard economist Jason Furman calculated as 92% of GDP growth in the first half of 2025.
Recent data from employment market analyses confirms these trends, showing reduced hiring across multiple sectors. Meanwhile, substantial capital continues flowing into AI investments despite limited evidence of productivity gains materializing thus far, according to financial reports.
Long-Term Labor Market Implications
Research from academic institutions suggests the current trend could create significant skill gaps and talent shortages in coming years. The economists warn that by restricting entry-level opportunities, companies risk undermining their own future capacity to fill senior positions when current experienced workers retire or move on.
Industry observers note that these developments coincide with broader industry developments and market trends in technology investment. Additional related innovations and recent technology advancements continue to shape the economic landscape, though their ultimate impact on employment remains uncertain.
Analysts suggest the central question remains whether AI will ultimately deliver promised productivity gains or contribute to market instability through overinvestment in unproven technologies, potentially creating conditions reminiscent of previous economic downturns.
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