Top analyst warns the economy is figuring out how to grow without creating new jobs, leaving a major vulnerability

Fortune

by Jason Ma

February 13, 2026

AI-Generated Deep Dive Summary

Michael Pearce, chief U.S. economist at Oxford Economics, has issued a warning about a growing trend of "jobless growth," where economic expansion is driven by higher productivity rather than job creation. This shift, aided by technological advancements like AI and compounded by factors such as an aging population and reduced immigration, poses significant risks to long-term economic stability. The labor force is expected to remain stagnant, with native-born workers participating less over the long term. This stagnation aligns with projections from other institutions, including J.P. Morgan and Goldman Sachs, which suggest that jobless growth could become the new normal in the coming years. While productivity gains are projected to boost GDP growth—potentially reaching 2.8% by 2026—this trend means fewer jobs will be created, with hiring rates already dropping significantly compared to previous years. AI's increasing role in automation is further exacerbating this shift, particularly in white-collar industries. Gad Levanon of the Burning Glass Institute notes that sectors like finance and professional services are experiencing a decline in employment while still contributing to GDP growth. This pattern mirrors historical precedents, such as the jobless recovery following the early 2000s tech boom. However, Pearce emphasizes that this reliance on productivity over people creates a major vulnerability. The labor market acts as a key buffer against economic downturns, and its weakening state leaves the economy more susceptible to shocks. Additionally, middle- and lower-income households, who rely heavily on job stability for

Verticals

businessfinance

Originally published on Fortune on 2/13/2026