Usually, when the economy grows, so does employment in the kinds of office jobs that form the backbone of modern corporate life. It hasn't been true lately, and that may solve a key mystery of the 2020s' economy.

The big picture: While overall employment trends have been steady, companies have successfully squeezed more out of a falling number of workers in the sectors that are the major sources of white-collar office jobs.

• These sectors — finance, insurance, information, and professional and business services — normally add jobs steadily outside of recessions. In the last three years, they have cut jobs on net, despite solid GDP growth.
• That started long before AI advances threatened more widespread job losses. That means there is a risk of an even gloomier future for people whose job is to look at a screen all day and move around words, numbers and lines of computer code.
• American workers are pessimistic about the job market, despite a low unemployment rate and rapid GDP growth. The decline in core white-collar sectors means it might not be much of a mystery at all.

Zoom out: Gad Levanon, chief economist of the Burning Glass Institute, calls these sectors the white-collar core of the economy. They account for more than 40% of U.S. GDP and 20% of U.S. employment.

• What is striking is that over the last three years, these sectors have continued growing in GDP terms, even as their employment has shrunk.
• They have thus become more productive and, Levanon argues, have become the major driver of an economy-wide productivity surge.

By the numbers: Total employment in these sectors peaked in November 2022 and is down 1.9% since then. Private sector employment outside those industries is up 4.1% in the same span.

• For context, from 2010 to 2019, these sectors added an average of 569,000 jobs a year. In the last three years, they've lost an average of 191,000 jobs a year.

What they're saying: "These industries form the white-collar core of the modern economy," Levanon wrote recently, encompassing banks, insurers, software, media, consulting, accounting, legal services and many corporate back-office functions.

• "They are also unusually exposed to process standardization and technology-driven efficiency gains, including workflow redesign and, increasingly, AI-enabled automation."

The intrigue: One potential factor in the job losses is that companies are course-correcting after excessively expanding payrolls during the COVID-19 pandemic and its aftermath.

• But the fact that the headcount reduction has been underway for more than three years suggests there's more to it than that.
• If the pandemic had never happened and the 2010-2019 hiring patterns had continued through today, these sectors would employ 2.3 million more workers than they actually do — implying there is some bigger structural break in demand for white-collar workers.

Between the lines: What seems to be happening is a multistep process by which core business functions require fewer workers.

• Step 1: In 2023, companies realized they hired more people than they needed during the super-hot job market of 2021 and 2022, and cut back.
• Step 2: They streamlined and automated work processes in 2023 and 2024 to deal with leaner staffing, and found that those steps allowed them to continue trimming labor costs.
• Step 3: In 2025 and now 2026, they either already see AI advances that allow them to push those savings further, or anticipate them arriving imminently.

The bottom line: "These are the office jobs that hire a lot of professionals with a college degree," Levanon tells Axios. "They're also the ones that show up at the top of the exposure measures to AI."

A congressional vote rebuking a set of President Trump's tariffs is the clearest sign yet of growing political pressure to roll back his trade agenda.

• In a rare break with Trump, six House Republicans joined with Democrats yesterday to vote to overturn Trump's levies on Canada, imposed using unprecedented presidential authority.

Why it matters: The measure is symbolic — Congress is unlikely to force a change to tariff policy. Still, it signals mounting political pressure on the White House to recalibrate its tariff approach as Americans express huge dissatisfaction with the Trump economy.

• For global trade partners and businesses, it's a reminder that U.S. trade policy could shift in more volatile ways than ever, depending on the political backdrop.

What they're saying: "Washington State's economy is heavily intertwined with that of our neighbors to the North," Rep. Dan Newhouse, a Republican who supported yesterday's measure, wrote on X.

• "Our agricultural producers' input and equipment prices have continued to climb, and Canada's reciprocal tariffs and actions have harmed our state's beer, wine, and spirits industry," Newhouse said.

What to watch: Newhouse added that Congress should not "tie its own hands on our Constitutional authority to levy tariffs."

• Any day now — perhaps as soon as Feb. 20 — the Supreme Court is expected to rule on whether Trump overstepped his authority when he unilaterally imposed a broad slate of tariffs.
• Trump is all but certain to veto any tariff-gutting measure when it reaches his desk.
• But if the Supreme Court slaps down Trump's tariffs, the administration will need to decide how — and which — to reimpose.

The intrigue: Shortly after last night's vote, Trump said that any Republican "that votes against TARIFFS will seriously suffer the consequences come Election time."

The bottom line: Lawmakers, including some Republicans, are on the record about the local economic effects of Trump's tariffs.

• It is a sign that trade rules that once seemed durable may be far more fluid in the years ahead.