The US economy is growing – so where are all the jobs?

When 42-year-old Jacob Trigg lost his job as a project manager in the tech industry he didn’t think it would take too long to find a new one – he always had before.

But more than 2,000 job applications later he is still hunting, trying to make ends meet with jobs in package delivery and landscaping.

“It’s a huge surprise because I’ve always been able to get a job very easily,” said Trigg, who lives in Texas. “It wasn’t even on my radar to be prepared for more than six months of unemployment. It wasn’t in my universe.”

His difficulties are an indication of a wider freeze in the US labour market, where job openings and hiring rates have dropped to multi-year lows.

Last year the US added an average of just 15,000 jobs a month, very few by historic standards.

The employment slowdown has raised concern about the health of the economy, but evidence of wider deterioration is elusive.

Layoffs have remained limited, apart from some high-profile cuts at firms such as Amazon and UPS and the unemployment rate has held steady at around 4.3%. Meanwhile, the wider economy continues to grow, expanding at a robust annual pace of 4.4% in the most recent figures.

It’s a puzzling, and unusual, mix.

“It’s actually very hard to point to another moment in the last 25 years where you have the combination we see today,” said Jed Kolko, senior fellow at the Peterson Institute for International Economics.

Trigg said he was “battening down the hatches” and hoping that whatever is causing the situation will pass.

But there are growing questions about whether the challenges he is facing could be here to stay.

Last October the investment bank Goldman Sachs put out a report, which was widely cited, suggesting the US could be facing a new period of “jobless growth” thanks to the arrival of new technology and artificial intelligence (AI) in particular, allowing companies to do more with fewer workers.

Concerns about the wider implications of such a change pulsed through discussions at the World Economic Forum in Davos last month and have contributed to widespread economic anxiety in the US.

Economics professor Constantin Burgi of University College, Dublin, said a decoupling of job gains and wider growth – like the one the US is seeing today – often occurs when an economy goes through a structural shift, like the advent of AI.

He noted while AI’s promise remains hotly debated, technology has also made outsourcing even easier.

In Burgi’s view the situation is likely temporary – but that does not mean it will be short-lived.

“It can be a couple of months but it can also be a couple of years,” he said. “If the jobs are really lost due to outsourcing or AI, then unless we find in a couple of years actually we still need those people and replacing them didn’t work, then those jobs are gone.”

For those in the trenches looking for work, the search is demoralising, regardless of its cause.

James Richardson, a 33-year-old from Pittsburgh, Pennsylvania, said without help from his parents, he would be homeless. He has applied to more than 1,200 jobs since being let go from his role as an information security analyst for a government contractor in October.

Sometimes his application is rejected within 15 minutes of submission, he said.

“It feels like there is no-one on the other side even bothering to take a look at your experiences and credentials.”

It remains unclear whether the jobs slowdown is actually due solely or even mostly to technological change.

Research suggests job losses due to AI have remained concentrated to just a few sectors.

And many US firms, especially in tech, still have on their payrolls a glut of workers who were brought on during the pandemic, when there was a small hiring boom. That could also help explain the lack of new vacancies.

The Trump administration’s crackdown on immigration is also curbing population growth. That makes it harder to find workers, but it also means fewer are needed.

Laura Ullrich, director of economic research at Indeed, said in her view another reason hiring appetites took a hit last year was the uncertainty stemming from the Trump administration’s cuts to government spending and his programme of tariffs.

Assuming the economy remains strong, she does not think the new jobs numbers will stay this low.

“I would definitely not call it a new normal, because I don’t think it’s normal,” she said. “I don’t think you can sustain the kind of labour market that we’re in over the long term.

“Having a very low-hire, low-fire, low-quits environment in a period of economic growth can only last so long.”

Stronger-than-expected job gains in January could be a sign that hope is on the horizon for job seekers.

But there are plenty of wild cards ahead, as Ullrich and others are quick to acknowledge.

As the economy grows increasingly reliant on spending by the very wealthy, it has also become more vulnerable to a sudden downward correction in share prices.

AI could prove as transformative as its most optimistic backers are predicting.

Or the US could enter a period of lower growth, if restricting immigration takes the wind out of the economy.

Amy Beson, who was laid off in April as part of wider job cuts at the University of Arizona, said she was not expecting things to improve anytime soon.

Universities have seen funding cuts from the government, making it harder for the 47-year-old to find the kind of work that used to be supported by grant programmes.

Meanwhile, she fears competition from the ranks of newly unemployed government workers.

Even expanding her search to healthcare, where she previously worked and which is considered one of the economy’s most resilient sectors, has not helped.

“It definitely is the most desperate I’ve ever felt,” she said. “I do worry that this is the new normal.”

Reporting contributed by World Business Express