Goldman Sachs’ chief economist says the US economy is entering a phase where strong economic growth no longer guarantees strong job markets, as AI pushes productivity higher and widens the gap between GDP and employment.
In a new Goldman Sachs Exchanges: Outlook 2026 podcast interview, Jan Hatzius says it is unusual to see the unemployment rate rising at the same time that headline economic growth remains solid.
He notes that the disconnect is already being driven by faster productivity gains, even before AI’s full impact shows up in the data.
“It is, I think, striking that the U.S. unemployment rate has been rising in an environment where the GDP numbers have been very solid. And that speaks to stronger productivity growth. We’ve seen in the US a pickup from about 1.5% productivity trends in the 2008 to 2020 cycle to about 2% now, probably with further acceleration potential, because that 2% doesn’t really have any significant AI impact in it yet.”
As AI adoption deepens, Hatzius believes productivity growth could rise another half percentage point or 25%, pushing the economy’s effective speed limit higher but also intensifying labor market strain.
“So as AI exerts a bigger impact on productivity growth, that 2% could become 2.5%. And that’s going to drive a bigger wedge between the performance of GDP and the performance of the labor market.”
While higher productivity is positive for long-term living standards, Hatzius warns it creates near-term social and political challenges. He says workers and consumers are increasingly pessimistic because economic growth is no longer translating into abundant job opportunities.
“That’s obviously a good thing in terms of long-term living standards, but it also brings some challenges. And right now, it means that consumers and workers are pretty sour on the economy because, in part, the labor market opportunities are pretty poor.”
Last month, BlackRock CIO Rick Rieder said that US unemployment rose from 4.1% to 4.4% in just a matter of months. He also highlighted that youth unemployment, or people aged 20 to 24 years, is hovering at 8.3%.
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