2026: Big Job Losses AND Big GDP Growth

Group 1 - The U.S. is experiencing a hiring recession, with job openings at 7.15 million, below the estimated 7.6 million [1][2] - The hiring rate has fallen to 3.2%, one of the weakest since the Great Recession, and the quits rate is at 2%, indicating worker caution [2] - Employers announced 1,206,374 job cuts last year, a 58% increase from 2024, marking the highest level of annual job cuts since 2020 [3][4] Group 2 - The unemployment rate rose to 4.6%, the highest in over four years, with forecasts suggesting it may peak at 6% this year [5][6] - Despite rising unemployment, GDP growth is predicted to soar to 5% in 2026, driven by key interest rate cuts and a booming data center sector [8] - Fourth-quarter earnings are expected to increase by 8.1%, with projections for earnings to accelerate to a 14.5% annual pace in 2026 [9] Group 3 - The relationship between labor and productivity is changing due to AI, allowing for strong GDP growth even with rising unemployment [10][11] - The economic divide is widening, with asset owners feeling confident while those without assets face financial stress [13][27] - Legislative proposals targeting investment wealth are anticipated, reflecting the growing economic split and potential policy risks for investors [33][35]