Something strange is going on. The US economy is growing, but no jobs are being added. In fact, unemployment is rising to 4.6 percent. Normally, it works like this: first jobs are created, then wages rise, then spending increases. Now that order has been reversed. People are spending money they have not earned.
Disposable income of American households grew by 0 percent in the third quarter. Yet spending rose sharply. People are dipping into their savings, taking on credit, or simply paying for things they cannot postpone. Healthcare spending in particular rose spectacularly. Hospitals, nursing homes and medicines. These were expenses people could not delay. When households spend more on healthcare, insurance and childcare, that is not a sign of confidence. It is a sign of pressure. And that pressure is not being absorbed by higher wages, but by saving less and postponing other purchases.
K-shaped economy has matured
The American economy is splitting in two directions, like the letter K. On one side are wealthy households and shareholders who benefit from high asset prices and rising home values. On the other side are workers and middle incomes, whose spending is increasingly driven by necessity rather than choice.
Corporate profits rose by 166 billion dollar in the third quarter. At the same time, investment declined. Companies are not expanding, they are not hiring new people. They have learned how to grow without adding workers. Doing more with fewer people. This is where the real problem lies. Consumption is the heartbeat of the economy. In America, consumers spend 68 percent of all money. Globally, that figure is 56 percent.
Companies are becoming more efficient through automation, AI and outsourcing. Every company that cuts jobs benefits individually. But the social costs are much greater. If a company cuts ten jobs of 100,000 dollar and replaces them with two new jobs at 40,000 dollar, a net 920,000 dollar of purchasing power disappears from the economy. Henry Ford already understood this in 1914. He paid his workers 5 dollar a day, not out of kindness, but because his workers were also his customers. Anyone who wants to get rich cannot make their customers poor.
That interaction has disappeared in our globalized economy. An American tech company can lay off staff in Texas and find customers in India. The direct link between wages and sales has been broken. The Federal Reserve speaks of “jobless growth”: economic growth without job growth. Despite lower interest rates and a growing GDP, the labor market remains weak. Young graduates struggle to find good jobs. AI is taking over entry-level positions. The gig economy absorbs the unemployed, but on average they earn only half to two thirds of their former income.
Warning signs
Credit use is rising. “Buy now, pay later” programs grew by 9 percent during this holiday season. That is not a sign of abundance, but of households under strain. More and more people are struggling with their car loan or mortgage. How people spend their money tells the real story. When consumers cancel streaming subscriptions, order less food and obsessively hunt for bargains, these are collective signals. Netflix stopped sharing subscriber numbers. That says enough.
Fear of technological unemployment is as old as the industrial revolution. In the nineteenth century, British textile workers destroyed looms out of fear for their livelihoods. They were wrong. New jobs emerged and prosperity grew. But this time there is a difference. In the past, markets were regional. Manufacturers depended on local workers as customers. There was a natural balance between wages and consumption. Now the economy is global, and the balance between wages and consumption no longer exists. Companies can cut costs without feeling the consequences directly.
Where looms replaced manual labor, AI affects the cognitive domain that long seemed exclusively human. This makes the psychological impact greater. The labor market was already in motion before AI. Platform economies, labor flexibilization and a shift of power toward capital created vulnerability among workers. AI accelerates and amplifies these trends.
Foundation is crumbling
The question is not whether consumers are under pressure, but how much pressure they can still withstand. If 68 percent of the economy depends on consumption, and consumers can buy less, how long can the economy keep growing? If you let an economy run on wealth effects instead of job growth, you are vulnerable once stock markets correct. That reversal can happen very quickly, but at the same time it can also become a new incentive for central banks to try to prevent such a scenario. An economy that grows while its foundation crumbles. That can work for a while. But not forever.
I wish you a healthy and prosperous 2026.
Han Dieperink is chief investment officer at Auréus Vermogensbeheer. Earlier in his career, he was chief investment officer at Rabobank and Schretlen & Co.