We’ve previously noted that revisions in the job data keep moving downward while GDP moves in the opposite direction, an unusual circumstance that suggests AI may be powering bigger productivity gains than the initial data showed.

Apollo chief economist Torsten Sløk agrees, including an AI productivity boom as one of his three explanations for the jobs/GDP moving opposite ways paradox:

The two other factors he notes are also HOTLINE themes: falling foreign-born employment and the reversal of huge increases in government employment that happened under Biden:

Sløk’s conclusion?

The bottom line is that the weak labor market is not due to weaker labor demand, but rather to weaker labor supply because of immigration, AI implementation and a normalization of job growth in the public sector.

In short, slow job growth is not the result of a slowing economy. Because if it were, then GDP, consumer spending and capex spending would also be slowing.