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The U.S. economy is still booming. Layoffs haven’t spiked. The stock market continues to climb. And yet, when a fresh batch of labor market data landed Tuesday, one of the country’s most respected economists said it made her stomach drop.

“It’s gut-wrenching,” Diane Swonk, chief economist at KPMG, told Fortune. “We’re growing, but we can’t generate jobs.”

“Rock bottom” hiring

Two releases—the November Job Openings and Labor Turnover Survey (JOLTS) from the U.S. Bureau of Labor Statistics and December’s private-payroll report from ADP—tell the same story from different vantage points. Hiring demand is cooling fast, and worker movement has frozen, yet employers are also still reluctant to cut staff. The result is a labor market stuck in a strange, late-cycle equilibrium that Swonk said looks nothing like past expansions.

Start with JOLTS, the Job Openings and Labor Turnover Survey, which, as official government data, holds more water with economists than the private ADP data. Job openings fell to about 7.1 million in November, down sharply from October and nearly 900,000 lower than a year earlier. The “quit rate,” which serves as the ultimate barometer for worker confidence and the ability to climb the career ladder, remained stagnant at 2.0% in November (Swonk said she was shocked by this number in particular).  Economists haven’t seen this level of inertia since January 2014, a period when the country was still clawing its way out of the Great Recession.

In a healthy economy, people quit for better-paying roles, driving wage growth for everyone. Today, however, workers are “clinging on” to the jobs they have out of sheer fear, Swonk said. This lack of movement has created a kind of mobility trap where the natural path to a middle-class raise has essentially vanished. While ADP data shows that “job-changers” saw pay growth accelerate to 6.6% in December, Swonk argues this is a statistical distortion. This “switching premium” is increasingly reserved for a tiny elite of specialized AI talent, while the average worker finds that the premium for job-hopping has evaporated, causing attrition rates to plummet and companies to freeze hiring.

This “frozen” state is further evidenced by what ZipRecruiter Chief Economist Nicole Bachaud wrote in a note was a “series low” in “other separations,” which economists usually interpret to mean retirements and transfers. These fell to just 232,000 in November. “Older workers are increasingly remaining in the labor market for longer,” Bachaud wrote, a trend driven both by rising life expectancy and “increased pressure on retirement savings due to affordability concerns.” It suggests potential economic hardship, as workers feel compelled to extend their careers. In other words, many boomers can’t enjoy their golden years in this economy.

People aren’t retiring, they aren’t moving, and they aren’t quitting. The labor market has (un)settled into an odd disequilibrium where hiring is at “rock-bottom” levels, as Samuel Tombs, chief economist from Pantheon Macroeconomics, wrote, but layoffs also remain low because companies are hoarding the workers they already have.

Economists say the explanation lies in a mix of post-pandemic caution and lingering labor scarcity. After years of companies on the backfoot during the “Great Resignation,” many appear determined not to let go of the people they have, even as they quietly stop adding new ones. 

“We had overstaffing in the wake of the pandemic, so I see it as a bit of a hangover from the surge [of hiring] as the economy reopened and everything went crazy,” Swonk said.

The widening wage gap

Fresh data from the Bank of America Institute provides a vivid look at how this stagnation is hurting different income groups differently, showing a “pronounced gap” in the wage growth experience. In December, higher-income households saw after-tax wage growth of 3.0%, while middle-income growth dropped to just 1.5%—its lowest point since May 2024. For lower-income households, the situation is even tighter at 1.1%.

With inflation still persistent, this means middle- and lower-income families are effectively seeing negative real wage growth. They are working in an economy that is expanding on the charts, but feeling poorer with every paycheck. This “K-shaped” divergence is fueling a spending divide where affluent households keep the economy “booming” through high-end travel and services, while the bottom 80% struggle to make ends meet.

This economic fracturing is taking a physical toll on certain parts of the country. The December ADP report revealed what, if the data is accurate, would be a massive localized crisis: the West region shed 61,000 jobs in a single month. This collapse was driven by the tech and professional sectors in the Pacific sub-region, which lost 59,000 positions. Swonk points to this as evidence of “jobless growth,” where firms are leveraging efficiency to “do more with less”. While some analysts from Oxford Economics argue the AI-driven shakeup is still “patchy,” Swonk notes that companies are aggressively cutting the white-collar support roles and middle-management positions that were once the bedrock of the middle class.

Whether those cuts reflect genuine productivity gains from AI—or simply a belated correction after post-pandemic overhiring—is still unclear, Swonk said. 

The fragile one-legged stool and a faint silver lining

Perhaps most concerning for experts is how narrow the base of our economic growth has become. For much of late 2025, the labor market was propped up by a single sector: Education and Health Services, which added 39,000 jobs in December. Swonk refers to this as a “one-legged stool” that is finally starting to buckle, especially as childcare subsidies freeze and the public sector broadly faces margin compression from tariffs.

Amidst this worrisome news, analysts are searching for a floor. BoFA notes that while the market is in a “low-hire, low-fire” mode, a slight rebound in their payroll estimate in December may suggest that “the worst of the slowdown is behind us.” Their report suggests it is possible that the labor market slowdown has “run its course” and that the deceleration in lower-income wage growth has finally leveled out.

However, the outlook for the rest of 2026 remains subdued. Jeffrey Roach, Chief Economist for LPL Financial, wrote that he expects monthly private payroll growth to stabilize at a meager 50,000 for most of the year. He said he was optimistic that private payroll growth may have “bottomed out,” but his chart spoke volumes about the precipitous decline in hiring.

While a temporary “sugar high” from tax refunds and minimum wage bumps in 19 states might provide a short-term lift to spending, Swonk said the relief will be short-lived. The economy, as it is, is incredibly vulnerable to a market correction.

“If you have anything that is a negative shock that hits the top 20%, you take down consumer spending pretty quickly,” Swonk said. “And that’s two-thirds of the economy.”



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The Department of Homeland Security’s deployment of more than 2,000 Immigration and Customs Enforcement officers and agents—the largest such enforcement action in U.S. history—turned fatal on Wednesday when an ICE officer shot and killed a 37-year-old woman in Minneapolis. 

The shooting was just one of several fatal incidents since ICE ramped up its mass deportation effort last year and raises questions about how officers are trained, especially as DHS has dodged questions about this process while more than doubling its number of agents since 2024. Recruitment efforts have been juiced by massive funding from the One Big Beautiful Bill Act, as taxpayers have found themselves funding an unprecedented swelling of immigration enforcement hiring.

Federal officers have also killed at least three other people, according to The Marshall Project, and have shot at least nine people since September, according to The New York Times

While ICE has ballooned to more than 22,000 agents—more than double from early 2025—the “wartime recruitment” tactics it has employed could be attracting combat-hungry or inexperienced people to the job, experts warn.

Recruitment tactics led to over 200,000 applications

DHS announced last summer its plans to hire 10,000 deportation officers, using what they internally called a “wartime recruitment,” according to an internal document reviewed by The Washington Post

ICE officials planned to spend $100 million over a one-year period to recruit gun rights and military support through influencers and geo-targeted advertising campaigns, according to The Post. The funding is part of the $1.7 billion allocated for border and interior enforcement, including $75 billion for ICE, to be spent over four years. 

The department’s strategy dedicated $8 million to influencers, including “former agents, veterans and pro-ICE creators,” with Gen Z and millennial audiences, according to internal documents reviewed by The Post. DHS planned to work with creators across traditional social media platforms like Facebook, Instagram, and X as well as platforms with more conservative users such as Rumble. DHS anticipated that their influencer would bring more than 5,000 applications. 

In addition to a salary ranging from $49,739 to $89,528 a year, DHS offers up to a $50,000 signing bonus split over three years, up to $60,000 in student loan repayment and forgiveness options, and retirement benefits. 

ICE also uses a marketing strategy called “geofencing” to send ads to the phone web browsers and social media feeds of anyone located near military bases, NASCAR races, college campuses, or gun and trade shows, according to The Post.

“The recruitment initiative utilized data-driven outreach efforts to recruit qualified patriotic Americans from across the country. As a result, ICE was able to exceed its hiring surge target while maintaining rigorous standards for training and readiness,” the agency wrote in the Jan. 3 statement. 

ICE did not respond to a request for comment.

Sarah Saldaña, former director of ICE, recently told The Post she was concerned that the speed of recruitment and the framing of jobs as a war effort in marketing campaigns increased the risk of attracting people seeking combat experience. 

The department received over 220,000 applications and hired 12,000 new officers in four months. Despite reaching their personnel goal, DHS is still recruiting more officers.  

“We continue to call on American patriots to serve the homeland because we know that there’s still more work to do — and we will not stop until every community in this nation is safe,”” said ICE Deputy Director Madison D. Sheahan in a statement.

Officer training questioned 

Renee Nicole Macklin Good was shot in her car as ICE agents approached her vehicle and demanded she open the door, according to video filmed by bystanders. An ICE officer shot her at close range and was briefly hospitalized after the vehicle hit him. 

Homeland Security Secretary Kristi Noem defended the officer who killed Macklin Good, saying that the officer “followed his training.” President Donald Trump doubled down on Wednesday, calling the video of the shooting “horrible to watch,” but said Macklin Good had “behaved horribly” and ran the agent over, even though video evidence disputes that claim. 

All new ICE agents are required to undergo the 8-week Basic Immigration Law Enforcement Training Program, during which they train 6 days a week at a facility in Georgia and learn to find, arrest, and deport people. In the past, ICE officials underwent a five-week Spanish-language training program and 16 weeks of basic training, according to the ICE website

The shooting comes after months of allegations of unprofessionalism and misconduct from advocacy groups. Even after a federal judge ordered ICE officers to wear individual badges, officers were seen without badges, according to the Chicago Sun-Times. Some new recruits showed up to training without full vetting, having failed drug tests, physical, or academic standards, and without disclosing criminal backgrounds. 

A senior DHS official told NBC News on Wednesday that ICE officers are trained to never approach a vehicle from the front and not to shoot at a moving vehicle because it will not stop it from moving towards the officer.

Representative Robin Kelly (D-IL) filed articles of impeachment against Noem on Wednesday. 

“Secretary Noem wreaked havoc in the Chicagoland area, and now, her rogue ICE agents have unleashed that same destruction in Minneapolis, fatally shooting Renee Nicole Good,” Kelly wrote in a statement announcing the move. “ It’s one thing to be incompetent and dangerous, but it’s impeachable to break the rule of law.”



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Defense company founder embraces Trump’s industry threats: It’s ‘good to scare people sometimes’

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While some companies and analysts fret about President Donald Trump’s threat to crack down on the defense industry, the founder of a $30 billion defense tech company has emerged as an unlikely supporter of his massive overhaul.

Palmer Luckey, who founded defense tech company Anduril in 2017, came out in nearly full support of Trump’s policies. While he noted without elaborating that all the changes “might not necessarily help the defense space,” he stood by Trump’s policy changes despite the president’s rebuke of defense companies as well as their CEOs.

“I think it’s even good maybe to scare people sometimes,” Luckey said in an interview with Bloomberg TV.

A spokesperson for Anduril declined to comment beyond Luckey’s public comments.

The reforms, which the White House outlined in a Wednesday executive order caps defense company CEO’s salaries at $5 million annually until certain conditions are met. As of around 2021, Luckey, who is not the CEO but the founder of Anduril, reportedly earned $10.9 million in compensation from the Company, TechCrunch reported. Luckey told Bloomberg he pays himself a salary of $100,000 a year. The CEOs of major defense contractors RTX Corp (formerly Raytheon) and Lockheed Martin made $18 million and $23 million, respectively, in annual compensation as of 2024.

Analysts warn of threat

The order also bars defense companies from issuing stock buybacks and dividends during periods of “underperformance.” It also required future defense contracts to bundle compensation with production speed and on-time delivery rather than “short-term financial metrics.” 

As a private company, Anduril does not issue stock buybacks or dividends, although Luckey has previously said it is “definitely going to be a publicly traded company,” someday

Luckey compared Trump’s defense reforms to “grounding” a teenager and noted they were positive as a temporary measure to help improve the sector’s performance overall. He added that the government should be the one calling the shots when it comes to public money spent on defense.

“I think when you are on the dole, and effectively run on the public’s wallet, the public should be able to impose whatever restrictions they want on you,” Luckey told Bloomberg TV.

Luckey’s support for Trump’s crackdown puts him at odds with his industry and potentially his own company’s interests (as it pertains to stock buybacks and dividends) as Anduril reportedly prepares for an IPO.

Trump’s defense industry reforms represent a major shift in the U.S. government’s relationship with private companies, and analysts have warned that they could pose a threat to the sector. Shares of major defense contractors, including Lockheed Martin, Northrop Grumman, and Raytheon, each sank about 6% following the news before largely rebounding Thursday.

Yet, Anduril, which boasts Pentagon contracts for tech to defend against autonomous drones and border security systems, is on track with the new reforms “in most cases,” Luckey claimed.

He pointed to Anduril’s “Arsenal-1” plant for building autonomous vehicles in Columbus, Ohio, as evidence. Luckey said the company spent $900 million on the plant and built it faster than expected. The plant will start production this summer. He noted, though, that the company is behind schedule in developing a man-portable system to protect soldiers from drones due to the technology’s complexity.

Luckey, despite likely owning a portion of privately-owned Anduril, claims his salary comes in well below Trump’s threshold for CEO pay, and said he’s not worried about Trump’s proposed $5 million ceiling.

“If they say that I’m not allowed to pay myself $1 until I get caught up, I think they should be allowed to do that,”  he said.



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President Donald Trump’s yearslong threats to take over Greenland have crescendoed this week. On Wednesday, White House press secretary Karoline Leavitt said Trump is considering a range of options in pursuit of the country, and that “utilising the U.S. military is always an option at the commander-in-chief’s disposal.”

But according to foreign policy experts, Danish officials have been baffled by Trump’s threats to resort to military intervention to gain control of Greenland because there’s already a long-standing agreement in place for the U.S. to increase its military presence there. In 1951, the U.S. and Denmark signed a little-known defense agreement allowing the U.S. “to improve and generally to fit the area for military use” in Greenland and “construct, install, maintain, and operate facilities and equipment” there. 

“This agreement is very generous, it’s very open,” Mikkel Runge Olesen, a senior researcher at the Danish Institute for International Studies in Copenhagen, told Fortune. “The U.S. would be able to achieve almost any security goal that you can imagine under that agreement.”

Given the wide-reaching terms of the contract, “there is very little understanding as to why the U.S. would need to take over Greenland at this time,” Olesen added.

Though Trump’s desire for Greenland has punctuated both of his administrations (in 2019, his intentions to buy the self-governing Danish territory were immediately rebuffed by Danish Prime Minister Mette Frederiksen), world leaders have taken the president’s most recent interest in the island more seriously. Following the U.S. forces’ capture of Venezuelan leader Nicolás Maduro, Trump has invoked greater imperial authority through what he has endorsed as the “Donroe Doctrine,” alluding to the 19th century Monroe Doctrine, a foreign policy warning European powers against intervention in the western hemisphere. 

Greenland—covered in ice and home to 56,000, mostly Inuit people—has become crucial to the defense of North America thanks to its positioning above the Arctic Circle giving it access to naval and shipping routes. Combined with its abundance of rare earths, the country has become coveted by Trump, who wants to secure it not only for its wealth of natural resources, but also against the Chinese and Russian ships he claims have anchored themselves in the Arctic region.

Long-standing U.S.-Danish ties

For more than 80 years, the U.S. has had a presence on Greenland, which became a foundational part of its deepening relationship with Denmark—and the North Atlantic Treaty Organization (NATO). During WWII, Danish ambassador to the U.S. Henrik Kauffmann, defied the Nazi-controlled Danish government and essentially brokered a deal with the U.S. to give America access to Greenland. A U.S. military holding there would prevent Nazi forces from using the island as a bridge between Europe and North America.

The deal that was supposed to dissolve after the war was instead bolstered by the creation of NATO in 1949, which obligated the U.S. to provide defense for Europe against Soviet forces. A new agreement in 1951 confirmed the U.S.’ rights to establish defense areas in Greenland, and is contingent upon the continued existence of NATO to be valid. In 2004, the agreement was updated to add Greenland, which established some self-governance in 1979, as a signatory.

The U.S. has only one military base on Greenland today, the Pituffik Space Base, down from about 50 during the height of the Cold War. But should the U.S. want to expand its presence there for national security reasons, as Trump has suggested, it would require negotiations with Denmark and Greenland, Olesen said. Historically, those negotiations have been friendly.

“In practical terms, there has been a tendency on the Danish and the Greenlandic side to always look at us security requests in Greenland with a lot of goodwill and a lot of openness,” he said.

Danish Prime Minister Frederiksen, citing the 1951 agreement, implored the Trump administration to stop his talk of taking over Greenland.

“We already have a defense agreement between the Kingdom and the United States today, which gives the United States wide access to Greenland,” Frederiksen said in a statement over the weekend. “I would therefore strongly urge the United States to stop the threats against a historically close ally and against another country and another people who have said very clearly that they are not for sale.”

Trump’s motivations for taking Greenland

Garret Martin, lecturer and codirector of the Transatlantic Policy Center at American University, speculates Trump’s insistence on appearing to brush off the 1951 agreement in favor of military force or offers to purchase Greenland (despite Danish officials repeatedly saying the country is not for sale), is an extension of the 19th century “gunboat diplomacy” philosophy the president took with Venezuela.

In the case of Greenland, Trump could be wanting to send a message to Denmark the U.S. has greater military capabilities that it is willing to deploy.

“Trump believes—and is often very keen to emphasize—the United States as leverage,” Martin told Fortune. “And it’s possible he’s trying to tell Denmark, ‘Look, you are in a position of weakness. Greenland really fundamentally depends on us. Why should we have to avail ourselves of those formalities when really we’re the key player?’” 

Trump’s tactics could also come from a desire to stake claim over the rare earth metals buried deep under the Greenlandic ice, which has become more urgent to Trump as China sits on 90% of the rare earth the world needs.

Anthony Marchese, chairman of Texas Mineral Resources Corporation, told Fortune earlier this week the president’s hope of mining those rare earths is nearly a fantasy. The northern part of Greenland is mineable only six months out of the year due to treacherous weather conditions, and expensive mining equipment has to endure months in that cold climate.

“If you’re going to go to Greenland for its minerals, you’re talking billions upon billions upon billions of dollars and extremely long time before anything ever comes of it,” he said.

According to Olesen, Trump’s desire for rare earths, as well as his national security urgency, can be addressed by Danish and Greenlandic officials through negotiations, making them less of a concern. The trouble will be if Trump’s biggest motivator to move into Greenland is a symbolic show of military prowess rather than specific demands that can be addressed through diplomacy.

“It’s hard to compromise with territorial expansion,” Olesen said.



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