Story perspectives

U.S. Economy Dodges Recession Amid Declining Labor Demand

3/26/2026

Summary

Story summary

The Brookings Papers on Economic Activity study finds the U.S. economy avoided a recession from 2023 to 2025 despite declining labor demand.
Short-run labor supply also declined, contributing to only a moderate rise in unemployment.
The analysis uses a dataset from January 1960 to February 2026, covering 94 indicators, including payroll employment and job openings.
The findings suggest the current labor market’s subdued supply, even as demand weakens, is unusual.

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Story summary

The Brookings Papers on Economic Activity study finds the U.S. economy avoided a recession from 2023 to 2025 despite declining labor demand.
Short-run labor supply also declined, contributing to only a moderate rise in unemployment.
The analysis uses a dataset from January 1960 to February 2026, covering 94 indicators, including payroll employment and job openings.
The findings suggest the current labor market’s subdued supply, even as demand weakens, is unusual.