One chart shows white-collar biz is thriving even as jobs dry up

He wrote in a Substack article that employment in finance, insurance, information, and professional and business services is collectively down roughly 2% since the end of 2022, while real output for these sectors has soared by 16%. The ongoing slow decline in employment for this group goes against historical patterns and highlights how workers and job seekers are facing a largely frozen, low-hire, low-fire job market.

"A growing share of the work businesses used to get done by consultants, contractors, call centers and their own back-office staff is now delivered by software, cloud and IT firms, which produce far more per worker and add almost no staff," Levanon told Business Insider. "That is why the sector's output keeps rising while its hiring has stopped."

The divergence also risks breaking the traditional link between economic growth and rising fortunes for everyday Americans. "Even a strong, continual growth in GDP may not translate into jobs for people, may not translate into a higher quality of life for people as well," said Cory Stahle, an economist at the Indeed Hiring Lab.

People looking in these kinds of sectors may be having a challenging time. "It's important to remember for these job seekers that a career is not necessarily built over the course of two or three years," Stahle said. "It's usually built over the course of two or three decades. So what the pattern is now could easily shift a couple of years from now. So it's important to be reactive but not overreact to what we're seeing in the data, either."

Have you been job searching in these white-collar sectors? Have you had to make a career pivot? Reach out to this reporter to share what that's been like at mhoff@businessinsider.com.

Levanon said on Substack that there's demand in these white-collar fields, but firms can meet it with fewer workers. Part of that could be due to employers shifting their priorities toward leveraging AI. Levanon said "the back-office and junior tasks" that AI performs best at are concentrated in the white-collar sectors he looked at.

Dante DeAntonio, senior director at Moody's Analytics, previously told Business Insider that the lack of hiring in white-collar fields is largely due to uncertainty around economic policy and AI. Other job market experts have noted that in Big Tech, employers pulled back after the pandemic-era hiring surge. The job market's woes can be especially difficult for people who lack years of experience.

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Whether companies are actually more productive because they're incorporating AI tools remains a question. Eric Kutcher, a senior partner and chair of McKinsey North America, recently said that there are individual productivity increases, rather than institutional-level gains.

Bureau of Labor Statistics data showed general labor productivity has increased, but not at a wildly accelerated clip.

Have you been job searching in these white-collar sectors? Have you had to make a career pivot? Reach out to this reporter to share what that's been like at mhoff@businessinsider.com.