AI Boom Fails to Generate Jobs as US Unemployment Stays High in 2026 Forecast

The US job market is forecast to remain stagnant through 2026. Economists predict a persistently high unemployment rate despite solid economic growth. This unusual trend is linked directly to artificial intelligence investments.According to a Bloomberg survey, GDP growth is expected but hiring will stay muted. This combination spells continued difficulty for American workers. It also poses a political challenge heading into the midterm elections.

Economic Growth Without Job Creation

Forecasters expect the economy to grow about 2% next year. This growth is largely powered by business investment in AI infrastructure. However, these investments are not creating many new employment opportunities.Diane Swonk, chief economist at KPMG, explained the dynamic. She noted AI infrastructure investments generate few jobs. There is also some job displacement from the technology itself.The health-care sector accounted for nearly all job growth in 2025. Excluding this sector, nonfarm payroll employment actually fell. Workers outside health care have faced a particularly difficult environment.

Worsening Inequality and Political Risk

The stagnant market has already slowed wage growth significantly. Pay is rising at the slowest rate in four years. Low-earners are seeing smaller raises than top earners, worsening inequality.This trend risks exacerbating the “K-shaped economy.” It represents a sharp turnaround from 2022-2023. Workers had more power and higher pay offers during that period.The situation carries political risk for Republicans. Voter anger over cost of living was a major issue in the last election. A continued weak labor market could influence the 2026 campaign season.Black Americans are being disproportionately impacted. Their unemployment rate jumped to 8.3% in November from 6% in May. The ratio of Black to White unemployment matches its highest level since 2019.Economist Michelle Holder warned of continued risks. She stated the fallout of a stagnant economy is falling heavily on Black workers. This trend may continue even if the overall rate holds steady.

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The forecast reveals a central economic paradox for 2026. Strong AI investment will drive growth but not improve job prospects. This sustained high unemployment scenario presents a significant test for economic policy and political stability.

A quick knowledge drop for you

Why is unemployment staying high during economic growth?

Growth is being driven by AI infrastructure investment. This type of capital spending does not create many new jobs. It can also displace some existing roles, according to economists.

Which sector is creating most jobs now?

Nearly all net job growth in 2025 came from the health-care sector. Employment outside health care declined over the first eleven months. This shows a stark concentration in hiring.

How are wages being affected?

Wage growth has cooled to a four-year low. The balance of power has shifted from workers back to employers. Lower-earning workers are seeing particularly slow pay increases.

What is the forecast for 2026 unemployment?

Economists surveyed by Bloomberg expect the rate to remain elevated. The average for 2026 is projected to be higher than in 2025. Any potential decline would likely come only late in the year.

Are some groups affected more than others?

Yes. Black Americans have seen a sharp rise in unemployment. Young college graduates have also lost their historical advantage in job searches. The pain is not being felt evenly across the workforce.

Could the situation get worse?

Yes. Economists like Citigroup’s Veronica Clark warn of skewed risks. A prolonged period of very low hiring could lead to larger layoffs. The next step could be worse outcomes if hiring doesn’t pick up.