However, a recent JPMorgan analysis challenges this narrative. The bank’s data reveals that tech companies’ big capex isn’t having much of an impact on the labor market. <\/p>\n
Hiring and spending have decoupled<\/p>\n
Spending and hiring are often correlated, as companies grow and require a larger labor force. Yet, as JPMorgan’s outlook notes, 2025’s capex boom has led to a “decoupling effect,” in which the two have come apart.<\/p>\n
The bank’s 2026 economic outlook looks at why this “decoupling” is unfolding in developed markets and highlights why investors should be concerned.<\/p>\n
“Across the DM hiring has weakened broadly and is tracking a 0.4%ar during 3Q25,” the report said. “Outside COVID lockdowns, this pace is the slowest since the early phase of the post GFC recovery. A deceleration in labor demand of this magnitude is normally a warning signal.”<\/p>\n
The report includes even more data that may be troubling for investors. US payroll growth has fallen to 0.6% on an annualized basis. In previous years, whenever it has fallen to such a low level, a recession has followed.<\/p>\n
<\/p>\n
JPMorgan<\/p>\n
JPMorgan’s analysts said that the kind of economic decoupling they’re tracking is extremely unusual, making it hard to account for in a full-year outlook.<\/p>\n
“Accelerating capex amid a stall in job growth is hard to incorporate into the outlook. Such a juxtaposition is not evident over any US expansion in the past 60 years,” the report added.<\/p>\n
The bank added that while they expect the economy to demonstrate a continued resilience, its analysts have had to scale back their baseline forecast because historical precedent makes points to this kind of job-growth decline historically leading to a recession.<\/p>\n
“This fear has shifted the Fed’s risk bias toward labor market weakness and prompted the restart of its easing cycle,” the report said.<\/p>\n
The tempered outlook suggests that JPMorgan’s analysts see recession signals flashing red, even as tech companies continue to spend heavily on AI. <\/p>\n","protected":false},"excerpt":{"rendered":"Corporate capital expenditures have surged in 2025, led by AI hyperscalers’ sprawling infrastructure buildout, but JPMorgan says something…\n","protected":false},"author":2,"featured_media":322015,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[181307,62558,64,63,9671,99,117376,438,52346,68953,164,181308,10347,97133,181306,113489,21718,4846,8207],"class_list":["post-322014","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-ai-hyperscaler","tag-analyst","tag-au","tag-australia","tag-bank","tag-business","tag-capex","tag-company","tag-datum","tag-economic-outlook","tag-economy","tag-historical-precedent","tag-investor","tag-job-growth","tag-jpmorgan-says","tag-kind","tag-labor-market","tag-recession","tag-report"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/322014","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=322014"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/322014\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/322015"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=322014"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=322014"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=322014"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}