Economic analysts are observing a growing disconnect between GDP expansion and labor market performance, pointing to what some describe as a “split-screen” economy. While output continues to rise at a solid pace, employment growth has shown signs of weakening, creating a complex picture for policymakers and businesses alike. n nRecent data indicate that consumer spending and industrial production remain robust, supporting forecasts of sustained economic growth in the near term. However, job additions have slowed compared to earlier in the year, with several sectors reporting tighter hiring budgets and reduced workforce expansion plans. n n”We’re seeing strength in output, but it’s not being matched by commensurate job growth,” said one economist. “This divergence suggests companies may be relying more on productivity gains or existing staff rather than bringing on new workers.” n nThe trend could reflect increased automation, improved operational efficiency, or cautious corporate sentiment amid inflationary pressures and higher borrowing costs. Some firms are opting to redeploy current employees or extend hours rather than initiate large-scale recruitment. n nLabor market indicators still show low unemployment, but the pace of new positions being created has decelerated. Wage growth has also moderated, which may influence consumer spending patterns in the coming months. n nPolicymakers are monitoring the situation closely, as persistent weakness in hiring could eventually dampen overall economic momentum despite strong current growth figures. n— news from The Wall Street Journal
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wsj.com
Stronger Growth, Weaker Hiring: Forecasters See a Split-Screen Economy The Wall Street Journal