The economy grew strongly last year, but hiring stagnated. It's making the gap between the rich and everyone else worse.
Business Insider
February 22, 2026
AI-Generated Deep Dive Summary
The US economy grew at a respectable pace of 2.2% in 2025, yet job growth stalled dramatically, with only 181,000 net jobs added—a sharp decline compared to previous years. This mismatch between economic output and employment expansion has deepened the divide between the wealthy and the rest of the population, creating what some call a "K-shaped economy." While those at the top benefit from strong spending and investment growth, many others face stagnant wages, reduced job opportunities, and heightened financial stress. Experts warn that this bifurcation could persist or worsen due to structural factors like AI adoption, trade policies, and demographic shifts.
The lack of job creation is particularly concerning given the context: the US economy has remained robust, with GDP growth masking underlying weaknesses in the labor market. Unemployment rates have stayed low, but hiring and job openings have declined, leaving many individuals struggling to find work. This situation is especially challenging for young graduates, those seeking new opportunities, and workers outside high-demand sectors like healthcare. The combination of rising prices and stagnant wages has left consumers feeling increasingly strained, with lower-income households bearing the brunt of inflation's regressive impact.
The divergence between economic growth and job creation raises significant questions about future prospects. Some economists predict that 2026 could bring stronger economic growth driven by business investment and consumer spending, but the labor market remains uncertain. The role of AI in reshaping industries adds another layer of complexity, as automation may further reduce demand for certain jobs while benefiting capital owners. Meanwhile, demographic trends and supply chain disruptions continue to influence the job market, potentially keeping hiring rates low even as the economy expands.
This economic divide matters deeply to businesses and consumers alike. For companies, navigating a labor market in flux requires strategic decisions about hiring and innovation. For workers, the lack of opportunities and wage growth poses significant challenges, particularly for those already struggling with financial pressures. The persistence of this "K-shaped" recovery highlights the need for policymakers to address structural inequalities and support those left behind by economic growth. As 2026 unfolds, understanding
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Originally published on Business Insider on 2/22/2026