Strong productivity growth argues for higher rates, not lower. Growth remains robust. Labor market weakness is structural (tariffs, immigration uncertainty) not cyclical, so rate cuts alone cannot fix it. 84% of annual job gains occurred in first four months of 2024, with virtual stalling since May.

Robust consumer spending (2/3 of GDP) is carrying growth, but 57% is done by top 20% of households—a record high—creating a 'jobless boom.' Productivity gains are from post-pandemic right-sizing, not AI. Structural hiring slowdown means Fed rate cuts risk stoking persistent inflation.