Unemployment is rising – and most job creation is coming from one sector: Healthcare. This trend reveals a deeper imbalance: Fewer workers paying taxes, more people living on benefits and growing inflationary pressure across the economy…
By Peter Reagan
Listening to media talking heads and politicians about the economy can leave you confused and wondering what is the truth. Depending on who you listen to, you might hear that the economy is the worst ever or you might hear that the economy is the best ever.
That’s why it’s so vitally important to look into the data (and to make sure that it’s good data, not edited and selected to support a specific narrative).
And when we look at one of the most important data sets to get an idea of how the overall economy is doing, we get some strange and potentially confusing answers.
What is going on
The data that we’re specifically looking at is unemployment rates in America.
Overall, unemployment is in a strange place. The unemployment rate is low by historical standards – at the same time, it’s at a four-year high. That alone points toward a slowing economy.
Specifically, the Bureau of Labor Statistics indicated that unemployment for November 2025 was at 4.6%, which is 0.4% higher than last November.
That’s 7.8 million Americans who are unemployed (not counting people who are no longer looking for work out of discouragement) which is 3.6% of the working-aged population in the U.S. The headline unemployment rate also understates labor stress, as it excludes millions of working-age Americans who have stopped looking for work altogether. (John Williams has done some groundbreaking work on how these long-term discouraged workers fit into the overall unemployment picture.)
To give you perspective on how many people are unemployed in the U.S., it’s about the same as the population of New York City. Ever been there? Yes, it’s still the biggest city in the nation – with over 8.4 million, that’s a massive number of unemployed people right now.
And, of course, people who are of working age who aren’t employed typically don’t have funds coming in to be able to pay for even basic needs such as food and shelter.
Factor in any families dependent on that unemployed worker, and you end up with an appalling number of people in the U.S. either living in desperate need or on the verge of living in desperate need.
But it’s not all doom and gloom. There is one bright spot in the economic data that you might find unexpectedly reassuring.
The bright spot in the data
The one sector of the economy that, unlike the rest of the economy overall, is maintaining strong employment numbers and is even hiring is healthcare.
Healthcare has been adding jobs, An article from Forbes notes that the job gains in any sector of the U.S. economy in November almost all came from the healthcare sector. In fact, the chief economist at The Burning Glass Institute, Gad Levannon, wrote, “Health care [employment] just keeps climbing. No drama, no pause, steady gains month after month.”
So, there is hope that jobs can be found for those who know where to look.
What many people haven’t considered, though, is why a growing healthcare sector may point toward concerning trends in the country overall.
What a growing healthcare sector points to
Understanding data so often comes down to context. We know that the healthcare sector is steadily hiring and growing, but just from those numbers, we don’t know why.
Of course, it’s not too hard to figure out why it’s growing and hiring: there are more and more people needed to provide those services because of growing demand for healthcare.
And one group has been growing consistently over the last several years, and that group, statistically, has significantly higher need for healthcare services than the rest of the population.
That group? The elderly. According to Census Bureau data, the number of Americans over 65 is projected to grow sharply over the next decade, increasing demand for medical services regardless of broader economic conditions.
Baby boomers are already in retirement and Generation X is moving towards that age group, too.
This information, without further context, is simply interesting. The underlying context, though, is where it gets concerning.
Why?
Because as baby boomers have aged into retirement and as Gen X does the same, these are huge numbers of people who are leaving the workforce.
This means fewer workers available to bring in income… and to pay taxes. And while this reduced number of potential workers in the workforce may help unemployment numbers in the long run, it doesn’t help to be able to pay for those rising healthcare expenses.
So, who will pay for those rising healthcare expenses? Well, considering that the portion of the population who are retirees is continuing to grow, that means more and more people will be dependent on government entitlement programs like Social Security for part or all of their income just to survive.
That means that a growing part of the population will be dependent on healthcare entitlement programs, primarily Medicare, but also Medicaid.
And when there are fewer workers in the overall workforce (meaning fewer people paying larger amounts of income tax to help pay for these programs), where is the money going to come from to make sure all of this medical care is paid for?
Where the money will come from
Historically, we already know where the money is coming from. It’s coming from the same place that every government working with a fiat money supply uses in times like this: money creation.
Politicians are sometimes forced to spend money either by law (and federal entitlement programs are mandated by law. They can’t be simply defunded).
Other times, politicians are forced to spend money by political practicality (after all, it’s not very popular to take away from someone what you’ve been paying for).
Still other times, politicians spend money because it makes constituents and donors happy (which is what drives all of the pork barrel spending in Washington).
And what happens when the government spends money it doesn’t have? History has the answer.
Historically, governments unable to rein in spending (while dealing with a shrinking tax base) rely heavily on money-printing. While printing money does make up the shortfall, it also devalues the currency – sending the costs of living higher.
So, when the number of workers paying in to fund these programs through their taxes decreases and the demand for healthcare and related services keeps rising, the federal government will keep spending money that it doesn’t have which will create more inflation.
Granted, it seems pretty unlikely that we’ll see hyperinflation (at least not in the foreseeable future) like some countries have seen in the last century or so.
We saw inflation exceed 9% just a few years ago! Granted, this was during a period of extraordinary spending and a truly unprecedented level of monetary expansion.
And inflation’s impact is cumulative meaning that once it has raised prices, those prices almost never go back down.
That’s why, even after inflation has cooled off to some extent compared to the previous administration, your grocery bill remains 25% or more higher than it was five years ago.
As the healthcare sector continues to grow, higher inflation will be the inevitable result that will affect all of us.
Unless you take steps now to shelter your purchasing power from inflation by diversifying with inflation-resistant investments. As you might guess, I believe physical gold and silver are ideal assets for a number of reasons. You can start your due diligence by learning more about how gold and other precious metals resist inflation, or learn why physical gold makes a great foundation for your savings.