U.S recession risks rise as economy becomes reliant on AI for growth

With the release of the latest U.S. labour force data, further confirmation has come that all is not well in the U.S. economy.

The labour force participation rate has fallen dramatically since late last year, down 1.1 percentage points from 62.5% in November to 61.4% in the latest data, which covers through July.

While the U.S. participation rate has been trending down since 2000, large drops of this magnitude are rare and, on this short time horizon, unheard of outside the pandemic.