Whether sluggish jobs growth<\/a> is a signal that we\u2019re on the brink of a recession or a sign that the AI productivity revolution is here is therefore one of the most urgent questions in US macroeconomics policy today.<\/p>\n Goldman Sachs has previously said that we probably won\u2019t really know until we\u2019ve been through a recession. That\u2019s because companies mostly shed jobs in downturns, and tend to focus on essential jobs in the recovery. However in the meantime the investment bank\u2019s economist Elsie Peng has taken a crack at understanding the slowdown in job creation.<\/p>\n She estimates that a downshift in immigration is the main culprit:<\/p>\n We estimate that the contribution to monthly labor force growth from immigration has fallen from 90k at the start of the year to 40k in August, and that monthly employment growth in industries relying heavily on immigrant workers has declined by 30k since the start of the year. This suggests that part of the recent job growth slowdown is due to a less concerning slowdown in labor supply growth.<\/p>\n Much of this comes from a fall in unauthorised immigrant labour, with GS\u2019s estimates of payroll growth for industries in which more than 10 per cent of workers are unauthorised immigrants shrinking from around 20-40k per month in 2024 to a contraction of more than 10k in August.<\/p>\n The pullback in government hiring has taken a further 20k off the monthly total, with job growth slowing from 30k\/month to 10k\/month. Tariffs and general uncertainty about whether the US may enter a recession in the next year are also weighing on hiring, Goldman reckons.<\/p>\n What about AI though? <\/p>\n Despite poring through the data, Peng finds \u201clittle empirical evidence that increased AI adoption or even the prospect of adoption is weighing meaningfully on the overall labor market.\u201d <\/p>\n She gives us bubble charts with teeny tiny r-squared numbers to make this point:<\/p>\n That said, looking at industries like marketing, call centres, graphic design, web search portals, computer system design, and software publishing \u2014 where they\u2019d expect disruption to show up first \u2014 GS reckon jobs growth is in these sectors running maybe 10k\/month lower than pre-pandemic trends. <\/p>\n Learn to code they said. Eek.<\/p>\n However, while Goldman thinks they can explain the slowdown in jobs growth so far, they don\u2019t expect it to persist \u2014 forecasting monthly payroll growth to average at 115k\/month in the second half of 2026.<\/p>\n This is in contrast to a number<\/a> of somewhat more gloomy<\/a> takes that have emerged<\/a> around the level of monthly jobs the US economy might be expected to create and get filled.<\/p>\n![\"\"](\"https:\/\/www.newsbeep.com\/uk\/wp-content\/uploads\/2025\/10\/https:\/\/d1e00ek4ebabms.cloudfront.net\/production\/5b2cfb8f-6126-4c91-9c47-a2c4665c808f.png\")
R^2 isn\u2019t quite zero, but it\u2019s not far off. \u00a9 GS Research, Why Has Job Growth Slowed? Oct 20, 2025<\/p>\n![\"\"](\"https:\/\/www.newsbeep.com\/uk\/wp-content\/uploads\/2025\/10\/https:\/\/d1e00ek4ebabms.cloudfront.net\/production\/f7c30c93-98e0-4d14-9249-ca773b64838e.png\")
Unemployment for tech workers in their 20s has doubled \u00a9 GS Research, Jobless Growth Oct 13, 2025<\/p>\n