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Join John Suter, vice president of economic research at CFC, as he unpacks the "jobless boom," explaining why a growing economy is creating so few jobs and why college graduates are feeling the squeeze most.
Contact the Economic & Market Watch team at economicresearch@nrucfc.coop.
Visit us, download the intelligence brief and dashboard and explore economic insights on our website, nrucfc.coop/Solutions.
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Listen to the latest economic insights from CFC experts John Suter, Sam Kem, and Antony Davies.
Hello, and welcome to the Economic and Market Watch podcast for the week of August 10, 2026. This is John Suter of CFC.
John Suter:You might not realize it, but the U.S. economy has been moving along in a very decent rate of growth. It's averaged 3.3% annualized over the past five years. While the trend has been slowing, the U.S. is expected to reach 2.1% this year, which is still above the historical average of 2%. This growth is quite respectable given all the unforeseen shocks that have occurred starting with the COVID pandemic in 2020.
John Suter:However, while GDP growth has resulted in plenty of wealth generation, our current economy is not creating many jobs. Economists have described this recent trend as the "jobless boom."
John Suter:For millions of workers, finding a job has become harder than at almost any other point in decades. Surprisingly, this time around, college-educated Americans are bearing the brunt of the slowdown. They're faced with rising unemployment even as jobless rates among their non-college counterparts have declined.
John Suter:Economists have a hard time explaining it, but there are some plausible reasons why the job market feels so lousy, for so many, in both urban and rural employment opportunities.
John Suter:Businesses have slowed hiring in large part because global uncertainty has made them wary to expand too much. Things could change dramatically at any moment. The current administration's tariff policies have made it more expensive for American businesses to get materials and products. And now, war in Iran is causing energy prices to skyrocket, making it riskier for companies to take on significantly more employees. Furthermore, since 2022, borrowing rates have remained elevated, making it more expensive to carry out capital expansions.
John Suter:Interest rates are not expected to budge for a while, for three important reasons: One, a wider risk premium for longer dated Treasurys, two, higher trending inflation and three, larger government deficits forecasted for the next several years.
John Suter:Then you have the different sector hiring needs. Hiring boomed in technology, food service, finance and other areas after the pandemic slump, but now many industries are hiring less than they were before the pandemic. The notable exceptions are in healthcare and in transportation and warehousing sectors, which are still growing at strong rates.
John Suter:But here's the kicker: These jobs don't always match what job seekers, especially recent college graduates, are searching for.
John Suter:Many new grads are looking for jobs in finance or technology or professional services where jobs are relatively scarce. We see these types of opportunities more in urban settings where there is a concentration of corporate headquarters and financial institutions.
John Suter:Some job applicants are not interested in agriculture, forestry, or natural resource based industries found in rural America. However, we are seeing opportunities in rural areas with regard to renewable energy and ecotourism in some regions.
John Suter:Another reason hiring has slowed is uncertainty about artificial intelligence, or AI. Even though the technology has not yet replaced large numbers of workers, it is already shaping how companies think about hiring. AI could bring productivity gains over the next few years, and it could be quite significant, which of course means that we see less job growth than we would ordinarily. Instead of rushing to bring on new workers, some firms are waiting to see how the technology evolves and which tasks it will eventually take over.
John Suter:Call centers are a good example of where AI voice agents are rapidly gaining ground. The problem is that for customer service and healthcare, almost everyone that places a call prefers talking to a real, empathetic, professional person. Are you one of the many who feel that way? I know I am, but then again, I'm considered "old school" by my younger colleagues.
John Suter:Another cause for concern is the length of time needed to find a job. The number of people who have been unemployed for six months or more has crept up over the past year. They now make up about one in four of total unemployed people, considered high by historical standards. The long term slog of looking for a job can affect a job seeker's mental health and confidence and also can create a stigma for hiring managers.
John Suter:You know the old way of thinking, "Why hasn't someone else hired this person?" Long term unemployment often raises an immediate red flag for hiring algorithms. Those resumes may be kicked out without a hiring manager ever getting to look at the merits of the applicant.
John Suter:Even though the frozen job market is not a dire situation, it still feels disappointing and frustrating for many workers. It's especially draining in contrast with the few years that followed the pandemic, a time of rampant hiring and worker power. In fact, many companies overhire during this time, so the cautious hiring approach in today's market seems logical, even though frustrating for many.
John Suter:While many economic indicators still show the economy is strong or at least stable, persistent inflation, high interest rates, and now rising gas prices are taking their toll, plus uncertainty from geopolitical conflicts to changing economic policies means the rest of the year could be rocky.
John Suter:Many economists believe that the current rise in productivity, which is propelling the economy to above average growth mentioned earlier, started five or six years ago. In other words, it started before the mass rollout of artificial intelligence large language models. And if that is the case, Americans will soon be seeing economic growth slowing significantly to reflect the stagnant labor market that exists today.
John Suter:Remember this simple line: More jobs, more income, more spending. That's what drives our economy.
John Suter:That's it for today.
John Suter:But before I go, this podcast is available on Spotify, Apple Podcasts, and other platforms. Look for the links at the top of the Economic and Market Watch page to find us and follow the show.
John Suter:As always, we thank you for listening, and be sure to download the Economic and Market Watch dashboard and intelligence brief. We'll talk to you soon.