My last post (November 26, 2025) discussed the apparent contradiction that the overall economy seems generally healthy while there are many signs of weakness in the labor market. I do not want to beat this topic to death, but the following graphic adds to the mystery.
It depicts the number of monthly job openings in the U.S. going back to 2000. Not surprisingly, corporations restricted hiring during recessions which are represented by the shaded areas in 2001, 2008, and 2020. The spike in 2022 was the well-known “Great Resignation” which followed the Covid pandemic. Following our national brush with mortality, many people found they liked working remotely, others retired early, and some simply dropped out of the labor force entirely. Companies had a tough time hiring and retaining workers leading to wage increases surging to roughly a 7% annual rate. As indicated, the number of job openings has since decreased by roughly 40%. While a material decline off of the peak was certainly to be expected, it appears that the number has now fallen below the long-term trend and it has been essentially flat for the past five months.
Economists propose several possible explanations. First, corporations may be cautious due to changing tariffs, uncertain immigration policy, sticky inflation and interest rates, and questions regarding future general economic conditions. However, the more interesting and important possibility is that we are seeing the initial impact of Artificial Intelligence. While most people agree that we are in the early innings of AI, might it already be replacing a material number of jobs? Because economic statistics can be quite volatile, it does not make sense to set off an alarm just yet.