White-Collar Recession

Why unemployed Americans in the professional and business service sector are struggling to find new jobs

- by GIULIA CARBONARO

OUT THE DOOR A quarter of Americans who lost their jobs in 2024 worked in professional and business services.

THE U.S. WHITE-COLLAR JOB market has experienced a dramatic slowdown in recent years, leading to a growing number of unemployed workers in tech, law, communications and media struggling to find new roles.

While the U.S. jobs market looks healthy overall, with the unemployment rate at 4 percent in January, reports of white-collar workers getting laid off and having a hard time finding new jobs are surging, as demand appears to have softened in these industries.

According to S&P Global, millions of Americans are currently employed in the professional and business services sector—though their numbers have recently stalled. From April 2020 to April 2024, the number of U.S. workers employed in this sector reached 22.9 million, growing by nearly 3.8 million in four years. But after reaching almost 23 million, that growth appeared to have largely stagnated, as the demand for jobs in the sector dwindled.

One in every four American workers who lost their jobs in 2024 worked in professional and business services, which are considered "white-collar jobs," S&P Global found in a recent report. Those roles include people working in everything from federal agencies to back-office support, financial operations and other administrative work.

"A combination of cyclical and structural headwinds in the U.S. economy have slowed hiring for skilled-knowledge, or 'white-collar,' workers," Aaron Terrazas, an independent economist and data scientist formerly of Glassdoor, told Newsweek.

While this trend is due in part to the fast growth of white-collar industries during the pandemic, which now don't need as many new hires, the main culprit appears to be the advancement of generative AI.