Navigating the New Economy

How Well Do You Know This Market?

Many are surprised by these fundamentals. The usual pattern—GDP up, jobs up—isn't holding the way it used to. Something shifted.

GDP Up, Job Growth Slowing

Source: FRED (BEA, BLS) — Annual percent change in real GDP, nonfarm business productivity, and nonfarm payroll employment. *2025 GDP and productivity are estimates based on Q1–Q3 data. 2025 job growth revised to 0.1% per February 2026 BLS benchmark revision (181K total, down from initial 584K estimate). 2020 productivity spike reflects composition effects.

GDP and productivity are both positive, but revised BLS data released in February 2026 painted a dramatically weaker picture: only 181,000 jobs were added in all of 2025, down from the earlier estimate of 584,000. That's 0.1% growth—the weakest since the 2010 recovery. Unlike 2001 (which saw 1.7M jobs lost), we're still adding jobs, but barely.

Update — January 2026: The economy added 130,000 jobs in January, with unemployment falling to 4.3%. Economists note January is noisy due to seasonal adjustments, but the number suggests potential stabilization after 2025's weakness.

The monthly view makes the deceleration even clearer:

Source: BLS Nonfarm Payrolls (FRED PAYEMS) — Monthly change in thousands. Negative months in red. 2025 figures reflect February 2026 benchmark revision (181K total vs. initial 584K). January 2026: +130K. Note: 2001 saw sustained job losses; 2025 shows dramatically slowing growth.

Source: BLS (FRED PAYEMS) — YoY % change in total nonfarm employment. 2001 went negative; 2025 is decelerating but still positive.

Two Interpretations

The case for "this is cyclical"

• 2021-2022 had a massive hiring surge (5.1% job growth in 2021, 3.0% in 2022). This could just be the hangover.
• After every hiring boom, there's a normalization. Companies over-hired during the recovery, now they're recalibrating.
• Productivity gains often spike when companies hold headcount flat and push for efficiency—a normal response to uncertainty.

The case for "this is structural"

• 2025 looks like 2000. GDP still growing. Productivity solid. But job growth decelerating with scattered negative months. In 2000, that was the slowdown before the dot-com bust—the moment companies started doing more with less.
• The difference: in 2000, the productivity tool was the internet. In 2025, it's AI. Both changed what "headcount" means for output.
• The speed of AI adoption is unprecedented—Claude Code hit $1B ARR in 6 months, faster than any enterprise software in history.
• After 2000, the output-to-labor ratio never fully reverted. The internet did permanently change how many people you need. Will AI do the same?
• The revision makes it starker. As one Guggenheim economist noted, "productivity in 2025 was maybe even stronger than we realized"—fewer workers, same or more output. That's exactly the GDP-up-jobs-down-productivity-tools-changing-the-math argument.

Enterprise AI Spend (2025)

Time to

B ARR

AI products are compressing enterprise software growth timelines by 10-20x.

Sources: Anthropic (Dec 2025), The Information/Fortune (2023), Slack Q4 FY2021, SaaStr, Microsoft Q4 2024. *GitHub shown at $2B (no $1B data).

What's Available Now

These tools are production-ready and low-cost. If you're on the market, picking these up adds instant value.

What This Means

1. AI Adoption Is Happening—Quietly

Companies aren't announcing "AI transformation." They're just buying tools.

2. Agility Matters

As speed to market increases, market validation matters more.

• New model: Product agility—getting products out faster, validating in the market, iterating.

3. Hire the Dip

Hiring slowdowns mean top talent is available. Smart companies are using this window to land candidates they couldn't get a year ago.

Buy tools, train people. 76% of enterprise AI solutions are now purchased, up from 47% a year ago. Focus resources on tool adoption and training, not custom AI development.

What This Means

1. The AI Premium Is Real

AI-adjacent skills command a 56% wage premium over identical roles without them (PwC 2025). Up from 25% the year before.

You don't need to be an AI engineer. Demonstrated fluency with the tools is enough.

2. Domain Knowledge Matters More

The premium is on:

• Knowing what to build and why
• Market validation
• Understanding users and business requirements

3. Position Yourself Now

Yes, the market has slowed. That's exactly when smart candidates prepare. Talk to Fluency about:

• Training: Which AI skills actually move the needle
• Positioning: How to stand out when hiring picks up
• Demand: Where the jobs are—healthcare, infrastructure, non-tech industries

AI fluency is the new literacy. You don't need to be an AI engineer. Demonstrated fluency with Claude Code, Copilot, or Codex—plus domain expertise—commands a 56% premium over identical roles without it.

The Bottom Line

The market shifted more than we initially reported. Revised data shows 2025 job growth was even weaker than first estimated—just 181,000 total, or ~15K per month. GDP is up, AI adoption is real but quiet, and the tools are cheap and production-ready. January 2026's 130K jobs offer a tentative sign of stabilization.