Bloomberg Surveillance · Thursday, July 23, 2026
Julia Coronado points out that the US demographic transition, with an aging population and restrictive immigration policies, is leading to minimal labor force growth. This, combined with AI demand, keeps the labor market resilient and makes it difficult to dislodge unless the economy enters a recession.
“So the job market is resilient, and that gives them scope. That gives them some some scope to raise rates. I think tom one of the sort of underappreciated macro dynamics that is quite significant, but we don't talk about it as much. Because we're so busy talking about AI all the time. Is the demographic transition the US is in.”
“We've got a rapidly aging, retiring baby boom population, and on top of that, we've chosen extremely restrictive immigration policy. That adds up to basically no labor force growth. That means that the unemployment rate really isn't going to rise unless the US is in a recession or heading into a recession.”
“There's no labor force growth, and I think what that means is it leads to a more resilient labor market. It's really tough to knock it over again. You need to be seeing truly recessionary dynamics on the demand side. And while you know the AI boom isn't particularly a creative to the labor market, it's also enough to keep overall demand on track and the labor market hanging in there.”