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‘I just don’t have a good feeling about this’: Top economist Claudia Sahm says the economy quietly shifted while policymakers wait for the wrong alarm | Fortune
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Analysts’ favourite gauge of the U.S. economy’s health comes from data. And at the moment, the numbers look OK … ish. Hiring is down, but unemployment hasn’t spiked, inflation isn’t ballooning (as feared) because of tariffs, and consumer spending is holding up remarkably well.
Economist Claudia Sahm is an expert (if not the expert) on the conditions that presage a recession and how policymakers should react as a result. She is the creator of “the Sahm Rule,” an employment indicator monitored by everyone from central banks to the global financial giants. The Sahm Rule says that a recession is likely when the three-month moving average of the national unemployment rate rises by 0.5 percentage points or more, relative to the minimum of the three-month averages from the previous year.
Sahm’s equation has proved invaluable. As JP Morgan observed, it “was 100% accurate prior to the pandemic, dating back to 1959.”
Therein lies the problem: During the pandemic, Sahm believes the tectonic plates of the economy began shifting and haven’t settled since.
The labor market has behaved strangely since the pandemic. President Trump’s anti-immigration drive has reduced the number of available workers. Employers have been reluctant to hire for new roles. Unemployment has ticked up but isn’t out of control by historical standards. Hiring remains tight, in a “low-hire, low-fire” environment.
Secondly, America’s institutions—the courts, the central bank, its federal agencies—have been politically swayed by the Trump Administration. Economists are no longer sure they act independently to provide the checks and balances that historically made the U.S. economy a transparent, and therefore trustworthy, place to do business.
The former Fed Section Chief who once served as Obama’s senior economist doesn’t think a blow-out event will crash the American economy. Rather, her fear is that aggregating events will reshape these two fundamental factors, and that the usual responses from policymakers are unlikely to be fit for purpose.
If a path can be charted, Sahm fears we’re moving the wrong way down it.
Tectonic plate one: Labor
Many economists have been eyeing the “knife-edge” in the labor market. They are watching the “breakeven number” (the job creation figure needed to stop unemployment from climbing) grind lower and lower, offset by significant immigration, which has reduced labor supply.
Sahm isn’t so concerned by the month-to-month shifts. Businesses are finding a steadier footing amid tariffs, according to the Fed’s first Beige Book of the year, meaning employers’ low-fire, low-hire approach is no longer driven by fear. Sahm’s concern is longer term: What it means for people looking for work but who can’t find a job, and whether they’ll be ignored by policymakers who are only alert for the technical numbers that signal a downturn.
“I get concerned when I hear ‘Well, we don’t have layoffs, so we don’t have a recession,’” Sahm told Fortune in an exclusive interview. “But you do have a very low hiring rate. It might not be an aggregate event, it might not be a broad-based contraction like we see in a recession, but it certainly has real implications for workers coming into the labor market.”
“Something’s happening here,” Sahm adds. “It’s clearly bad for people looking for work, but we can’t just have this, ‘Oh, if we avoid a recession, all is good.’ It could be that we’re dealing with much more structural shifts, and those aren’t just hard to forecast; they’re hard to assess in the moment because those structural shifts can be very slow.”
AI replacing roles is, of course, a factor. Fed Chairman Jerome Powell is monitoring the situation “very carefully.” JPMorgan’s CEO Jamie Dimon said LLM-driven layoffs could lead to civil unrest. Yet the hand-wringing over the impact of AI doesn’t explain the depressed hiring rates we’re seeing right now, Sahm said.
An optimist might suggest that a lower hiring rate is a shake-out from incredibly tight conditions during the pandemic. Between 2022 and early 2024, the Beveridge curve—usually a downward slope illustrating the relationship between job openings and the unemployment rate—was more of a straight line: In theory, for every job opening there was a person in need of a role. Fewer openings at the moment may merely show that employers have found the talent they need, and don’t want to add individuals who—in a tight market—can demand the pay and conditions they want, a phenomenon observed by ADP’s chief economist Dr Nela Richardson.
The data also isn’t illustrating an economy in need of fiscal stimulus to generate activity—though that’s what it’s getting this year anyway in the form of the One Big, Beautiful Bill Act. Analysts are also banking on interest rate cuts from a more dovish Fed chairman, but again Sahm feels this won’t kickstart sluggish hiring: Sahm described the behavior as how a government might “traditionally” stimulate a weakening economy, “kind of [a] front-end recession response.”
“But against the backdrop, as best we know from the data, business activity looks pretty OK, consumer activity looks OK. I’m concerned that stimulating more demand isn’t what’s holding back hiring—there’s something else.”
Sahm’s own creation isn’t demanding action: Currently, the recession indicator is sitting at a mild 0.35. She warned policymakers against relying too heavily on the tool in the current cycle, saying their attention should be focused—”maybe even more so”—on the labor market because “it doesn’t hold the typical pattern, which means our typical tools to fight [it] like a recession may not be the right ones.”
Tectonic plate two: Institutions
For all the ingenuity and commitment it took to build America into the globe’s preeminent economic force, the country would not retain the title if it weren’t for the strength of its institutions. President Trump witnessed the market blip when he threatened the independence of the Federal Reserve with remarks about firing Chairman Powell, and Wall Street has been reinforcing the importance of an autonomous central bank ever since.
But Trump hasn’t stopped pressuring the Fed, with Chairman Powell now being investigated by a grand jury over expensive renovations to central bank buildings.
“I think we can look and say up to this point with pretty high confidence, that it’s been economics driving the interest rates,” Sahm said. “What I have a hard time with is [that] the escalation has continued, and the Fed itself is going to go through a transformation this year with a change in leadership. If Powell had two or three more years on his tenure as chair, I would feel more confident than I do with the fact that he has four months left.”
Like the labor market, Sahm’s concern is that institutions like the Fed—where she spent more than a decade of her career—will be allowed by policymakers to drift.
“We’re not on a good path, and while I applaud Jay Powell for standing up and having a statement and pushing back, over the long haul that’s not a sufficient check on pressure,” she added. “I don’t know where this goes, and [where] the economy may. We may see inflation come down more rapidly, we may end up in an envionment where lowering interest rates makes sense and we diffuse the issues by that.
“But I just don’t have a good feeling about this.”
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Eleanor Pringle
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Portland Metro Unemployment Holds At 5%, Construction Jobs Slide – KXL
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SALEM, OR – The Portland metropolitan area’s unemployment rate remained unchanged at 5.0 percent in December, but was higher than a year earlier, when it stood at 4.2 percent, according to new labor market data.
The region’s jobless rate has climbed gradually from a post-pandemic low of 3.2 percent recorded in April 2023 and has hovered at or near 5.0 percent for the final four months of 2025. About 67,900 residents were unemployed in December, roughly 11,000 more than a year ago.
Statewide, Oregon’s unemployment rate was slightly higher at 5.2 percent, while the national rate was 4.4 percent in December.
Seasonally adjusted nonfarm employment in the Portland metro area dipped by 400 jobs in December. November’s job gains were revised upward, from an initial estimate of 1,100 to 1,700 jobs.
Construction continued to underperform historical trends, losing 3,000 jobs in December. Typically, the industry sheds about 600 jobs during the month. Most other major industries posted job gains or losses in line with normal seasonal patterns.
Over the past 12 months, the metro area has lost 12,200 jobs, a decline of 1.0 percent. Most major sectors saw net losses, though private health care and social assistance added 6,400 jobs, followed by local government, transportation and warehousing, and leisure and hospitality.
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Tim Lantz
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California lawmakers ignore most state audit warnings, costing billions
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For more than a decade, the California State Auditor has issued warnings to lawmakers about government waste, fraud, cost overruns, and broken oversight systems across state government. Again and again, audits called for changes in state law meant to fix those problems.
In many cases, those fixes did not happen.
CBS News California Investigates recently exposed how lawmakers ignored years of warnings from the California State Auditor about hidden traffic violation fees.
That raised a broader question: What other audit warnings have lawmakers been ignoring, and at what cost?
An exclusive CBS News California analysis of state audit recommendations dating back to 2015 found lawmakers failed to enact three out of every four recommendations that required legislative action.
The unresolved warnings span some of California’s most expensive and urgent problems, including unemployment fraud, homelessness spending oversight, public safety funding accountability, wildfire risk, and drinking water safety, just to name a few.
These are audits the Legislature asked for. Audits Californians paid for. Audits with recommendations that remain unresolved, while California continues to lose money to potential waste and fraud.
California’s Unfinished Business
CBS News California analyzed state audit recommendations dating back to 2015 and found the following.
- California lawmakers failed to act on three out of every four state audit recommendations
- There are more than 300 outstanding recommendations to the legislature
- The outstanding recommendations impacted more than 100 different issues and agencies
- Two out of three state audits include recommendations on which the auditor notes that lawmakers have taken “no action”
at all.
CBS News California Investigates is now building a publicly searchable “Audit Accountability Tracker” to help viewers and voters track what lawmakers have not done and what that inaction costs Californians.
The database is not yet public, but the early findings reveal a series of patterns the Auditor has documented for years: the same problems, the same risks, the same inaction.
Billions lost to fraud and broken oversight
The analysis reveals that some of California’s most costly cases of fraud or untracked spending were the subjects of numerous prior audits. According to the auditor, state losses may have been mitigated if lawmakers had acted on earlier recommendations.
“There would still be issues, but not as serious as we are now,” former California State Auditor Elaine Howle told CBS News California in 2021 while discussing two audits related to pandemic unemployment fraud.
Prior audits warned lawmakers that the state’s Employment Development Department (EDD) left Californians vulnerable to fraud, but by the time lawmakers acted, it was too late.
It’s estimated that California lost more than $20 billion to pandemic unemployment fraud when EDD issued billions in fraudulent payments to criminals while out-of-work Californians struggled to get an EDD rep on the phone, let alone get paid.
Years later, new audits reveal that EDD fraud continues, along with outstanding recommendations to lawmakers.
Homelessness spending offers another example of state audit warnings that lawmakers ignored. The Auditor repeatedly warned lawmakers that California lacks a statewide plan, outcome tracking and accountability for homelessness program spending.
The state spent more than $20 billion without uniform standards to measure effectiveness. Meanwhile, audit after audit repeated the same core warnings while the recommendations to the legislature appear to have stalled.
In many cases, recommended legislation died behind closed doors without a public vote revealing who killed it or why.
It is not just about money
Outstanding audit recommendations also involve risks to public safety and public health that may have been mitigated if lawmakers acted sooner.
For instance, the auditor found that water districts were failing to tell people that their drinking water was unsafe. It’s an issue CBS News California has been covering for years.
The auditor pushed for more disclosure, and lawmakers failed to act.
As wildfires continue to destroy communities, lawmakers take “no action” on auditor-recommended oversight laws and ignore other recommendations related to law enforcement, courts, healthcare for pregnant women, hate crimes, untested rape kits, affordable housing solutions and more.
Lawmakers even failed to act on polices that, according to the auditor, put child abuse victims at risk.
In all, CBS News California identified more than 300 outstanding audit recommendations.
New lawmakers, old warnings
CBS News California Investigates shared some of our findings with Assemblymember John Harabedian, the new chair of the Joint Legislative Audit Committee (JLAC). The JLAC committee decides which issues the auditor investigates.
“When I hear that there are many audits and recommendations that haven’t been addressed, I think that’s a wake-up call, Harabedian said.”
Harabedian is part of a large new class of lawmakers, many of whom were not in office when the recommendations were written.
“I think that being new to the Legislature and now being the chair of the Joint Legislative Audit Committee, I am keenly focused on oversight,” he said. “I do think investigative journalism, what you’re doing, is important. It keeps everyone accountable and highlights issues that might not be on my radar or (my colleagues’) radar.”
What comes next
CBS News California Investigates is building an Audit Accountability Tracker, a public database designed to show in one place:
- What the State Auditor told lawmakers to fix
- Which recommendations required changes in state law
- Which ones remain unresolved
- Why they matter to Californians
We are also waiting for additional financial records from the California State Auditor’s office to quantify the potential cost of inaction and potential future savings if lawmakers act.
The tracker will serve voters and viewers as well as the more than 30 new lawmakers who were not in office when many of these audits were issued.
The warnings are written, solutions identified.
The question is, will the new class of lawmakers finish what their predecessors started?
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US economy added 50,000 jobs in December, capping off one of the weakest years of job gains in decades
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(CNN) — Hiring slowed more than expected in December, a sluggish end to what was one of the weakest years of job growth in decades, a dynamic that further amplified America’s affordability crisis.
The US economy added an estimated 50,000 jobs last month, slowing from a downwardly revised 56,000 jobs added in November, according to Bureau of Labor Statistics data released Friday.
Still, the unemployment rate edged lower to 4.4% from a revised 4.5% in November.
Economists were expecting a net gain of 55,000 jobs in December and an unemployment rate of 4.5%, according to FactSet consensus estimates.
With December’s estimated job gains, which are subject to revision, the US economy added just 584,000 jobs last year. Outside of recession years, that’s the weakest annual job growth seen since 2003, BLS data shows.
And those meager gains were driven almost entirely by a couple of industries.
“The United States is in a jobless boom,” Heather Long, chief economist at Navy Federal Credit Union, said in an interview with CNN. “There was almost no hiring in 2025 … we would be talking about job losses in 2025, if it weren’t for health care and social assistance.”
Unemployment becoming a ‘permanent state’
In addition to the tepid gains recorded for December, October and November’s payroll estimates were revised lower by a combined 76,000 jobs.
Even still, the meager pace of employment growth is actually even weaker than the December report shows – something that will become clearer in the January jobs report.
That’s when the BLS will release the results of its annual benchmarking process that squares up the more real-time survey-drawn monthly estimates with the heavily lagged (but more accurate) payroll figures from employers’ quarterly tax filings. The preliminary estimate, released in August, was that 911,000 fewer jobs were likely added for the year ended in March 2025.
“With these revisions, the story of payroll employment in 2025 will convert, ex post facto, from ‘snail-like growth’ to ‘recessionary-like conditions,’” Brian Bethune, a financial economist and professor at Boston College, wrote in commentary on Friday.
This low-hire, low-fire labor market has resulted in more people on the outside looking in. In December, the share of people who were unemployed for 27 weeks or more rose to 26%.
That indicates “unemployment is increasingly becoming a permanent state rather than a temporary transition,” Nicole Bachaud, ZipRecruiter’s labor economist, wrote in a note on Friday.
Still, Friday’s report did have a couple of bright spots, which included stronger-than-expected wage gains. Average hourly earnings rose 0.3% for the month and picked up to 3.8% for the year – a modest gain over inflation.
A deep hiring chill since April
The labor market was already slowing, heading into 2025, as it continued to normalize following the seismic economic impacts of the Covid-19 pandemic.
However, the gradual cooling turned sharply into a freeze by the spring. About 85% of the year’s job gains occurred in the first four months of the year, Long noted.
In April, President Donald Trump made his “Liberation Day” announcement of a massive suite of broad and steep tariffs on many of the goods imported into the country.
That and other dramatic policy shifts sent uncertainty surging higher and tossed an ice bath on sentiment in the process.
Tariffs, and the uncertainty surrounding them, were one of three big factors that contributed to the “hiring recession” that engulfed pretty much all industries last year, Long said in an interview with CNN.
In addition to tariffs, jobs continued to be scaled back in industries that over-hired during the pandemic. Additionally, the rise of artificial intelligence played a role as well, she said.
“What happened with AI is firms needed to use their cash to invest in AI, and so they pulled back on hiring in order to free up that cash,” she said. “It wasn’t so much like, ‘I’m going to use the robot to replace the human.’ It was, ‘I need the dollars to go to tech investment instead of human investment.’”
What resulted were muted employment gains – or even outright losses –across most industries.
The lone exceptions were health care – an industry growing as a result of an aging population – and leisure and hospitality, which has reaped some of the spoils from an increasingly bifurcated economy, where well-heeled Americans see continued wealth gains while a larger share of middle- and lower-income households are experiencing increased strain.
That was again indeed the case in December.
Leisure and hospitality businesses saw net job gains of 47,000, while health care and social assistance added 38,500 jobs, BLS data showed. Jobs were shed across goods-producing businesses, particularly those in manufacturing, as well as retail trade (where seasonal hiring wasn’t as flush as in years past)
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Alicia Wallace and CNN
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Industries of the Blind offers career path for the visually impaired
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GREENSBORO, N.C. — People living with disabilities play an important role in North Carolina’s workforce, and organizations like Industries of the Blind in Greensboro are working to expand those opportunities. For many North Carolinians, that support is life-changing.
At Industries of the Blind, 21-year-old Brendon Brown spends his days packing and shipping military uniform orders that are distributed nationwide. He started at the organization just over a year ago.
“I started out picking on the floor, getting everything that goes in the boxes, and I moved to shipping a couple months ago,” he said.
Brown is legally blind. He lost his vision for the first time as a toddler after an allergic reaction.
Brendon Brown is legally blind after suffering from an allergic reaction as a kid. (Brendon Brown)
He regained it off and on for about a decade, but an infection in 2017 caused him to lose his sight completely.
Finding employment wasn’t easy. Brown said he applied to multiple places before discovering Industries of the Blind.
“I tried a few different places, and everybody sounded promising when you talked to them, but then you never hear back from them after that,” he said.
According to the North Carolina Department of Commerce’s Labor and Economic Analysis Division, one in nine working-age adults in the state was living with a disability as of 2022. Roughly 145,000 of those adults were visually impaired.
Nationwide, the American Foundation for the Blind found that in 2024, 10% of people ages 16 to 64 with visual disabilities were unemployed — more than double the unemployment rate for people in the same age range without a visual disability.
A separate study from the U.S. Bureau of Labor Statistics shows that as of 2024, 22% of all working Americans were living with a disability.
Industries of the Blind aims to close those gaps by offering meaningful work and long-term career paths.
Richard Oliver, the organization’s director of community outreach and government relations, said Brown represents exactly why their mission matters.
“We like to put the effort into Brendon so he can learn and grow,” Oliver said. “We want him to be here for a long time.”
Brendon Brown says he loves to fish when he’s not at work. (Brendon Brown)
Brown is already taking that next step. On Nov. 25, he graduated from the company’s 2025 Future Leaders Academy cohort.
The program teaches employees skills in finance, human resources, production and business development. His goal is to eventually move into a leadership role.
“I have no plans on changing anytime soon,” Brown said. “I enjoy it, I see lots of room to grow.”
A new class of Future Leaders Academy participants will begin next year.
Earlier this month, the North Carolina Department of Health and Human Services announced that Project Spark, one of its initiatives that supports people with intellectual and developmental disabilities, will expand to 10 new locations across the state.
NCDHHS says it will expand to new sites in Greensboro, Winston-Salem, Durham, Greenville, Kinston, Jacksonville, Wilson, Gastonia, Asheville and Boone.
Follow us on Instagram at spectrumnews1nc for news and other happenings across North Carolina.
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Ashley Van Havere
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Oregon Set to Become 1st State in the Country to Offer Unemployment Benefits to Striking Private & Public Workers – KXL
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SALEM, Ore. — Come January 1st, 2026 Oregon will become the first U.S. state to allow both public and private sector employees to receive unemployment benefits while on strike.
SB 916 was hotly debated but signed into law by Governor Tina Kotek this summer.
It would allow for eligible striking workers to seek payments after a 2 week waiting period. There would be a 10 week cap. And if a deal is reached with employers that covers back pay, all benefits would have to be paid back.
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Brett Reckamp
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‘So the actual rate is higher?’: JD Vance says unemployment statistics undercount joblessness and accidentally proves the problem is worse | The Mary Sue
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On December 16 in Pennsylvania, Vice President JD Vance tried to spin rising unemployment as a sign of economic strength. But unknowingly, he walked straight into an argument that admits joblessness may be worse than the headline number suggests.
At a Uline warehouse in Pennsylvania’s Lehigh Valley on Tuesday, JD Vance delivered the Trump administration’s familiar economic victory lap. He praised job creation, wage growth, and investment, and blamed Joe Biden for everything that went wrong before January. The VP even graded the current economy an “A+++” under Donald Trump, mimicking his words.
Early in the speech, Vance touted headline-friendly figures to sell the message. He pointed to 61,000 jobs added in November and claimed private-sector wages were growing at 4.2%. He framed it as proof that Trump’s economic agenda was already delivering historic results. According to Vance, this was the fastest wage growth the country had seen “in many, many years,” because the administration “believes in you and fights for you.”
But then came the press questions, something his speech writer couldn’t prepare him for. A reporter from WFMZ’s 69 News noted that while November saw job gains, October had lost 100,000 jobs. On top of it, the unemployment rate had climbed to 4.6%, the highest since the pandemic (via Reuters). He asked a straightforward question: How do income tax cuts help people who don’t have jobs? And how does the administration plan to inspire companies to hire?
Vance dismissed the concern almost immediately, arguing that tax cuts always help because more disposable income is “good for everybody.” He waved away the October losses by claiming they were mostly government jobs. Firing bureaucrats and hiring “great Americans,” he said, was the point instead. However, he then tried to explain away the unemployment rate, and things went disastrously off the rails.
Vance argued that the unemployment rate only counts people actively looking for work. If someone stopped searching years ago, they’re unemployed but not counted in the official statistics. Bizarrely enough, the rise in the unemployment rate to 4.6% wasn’t bad news at all, according to him. For him, it is evidence that discouraged workers were re-entering the labor force because wages were rising and opportunity was finally back under Trump.
What you’re seeing, as wages go up and as more investment comes into our country, is that people who weren’t looking for work under Biden’s administration are getting out there and looking for work in the Trump administration. That’s exactly what we want. We want to get people off the sidelines and give them a good job with good pay.
What Vance essentially admitted without realizing is that the 4.6% unemployment rate excludes a large group of jobless people who have given up looking for work. If discouraged workers are now looking again and still can’t find jobs, that doesn’t mean unemployment is improving. It means previously invisible joblessness is becoming visible.
In other words, if his explanation is true, then the real problem is bigger than 4.6%. Rising unemployment isn’t automatically a positive signal. Sometimes it reflects people re-entering the labor force, yes. But it can also mean hiring isn’t keeping up with demand, that wages aren’t enough to absorb new entrants. Vance skipped that part entirely and treated a higher rate as proof of success.
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Kopal
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Recent Weak Job Figures May Mask an Even Worse Employment Outlook
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People have long found ways to draw different conclusions from the same set of statistics — diverging interpretations that are even more common in these divided times. But it’s becoming increasingly difficult to read recent employment data without inferring that they reflect an apparently stalling labor market that has sent the the unemployment rate to 4.6 percent — the highest since September 2021.
Economists say that fear is based on indications that despite signs of expanding economic growth, the weakening employment outlook is getting worse. Those concerns rose this week when the latest government data showed employers added only 64,000 new jobs in November. That was less than a third of the average 186,000 monthly hiring rate in 2024, and followed anemic recruitment activity since May. It also came on the heels of a 105,000 headcount decline in October.
Those numbers reflected businesses remaining wary of uncertainties stemming from import tariffs, mass deportations, and other disruptive government policies. As those doubts about the economy’s health spread, companies adopted the cautious practice of maintaining, rather than expanding staff levels. Indeed, while those no-hiring strategies slowed job creation rates to almost zero, employers’ refusal to undertake mass firings has also helped keep the employment situation stable in recent months.
But that now may be changing.
November’s 4.6 percent unemployment rate was an increase from 4.4 percent in September — the last time official figures were published — and considerably higher than 4.1 percent a year ago. It also marks the highest jobless level in more than four years. And even as that key metric has risen, other factors have also started troubling economists.
For starters, wage growth advanced by only 3.5 percent in November compared to the same month last year. While the latest official figures showed inflation slowed to 2.7 percent in November, the average monthly rate has hovered around 3 percent in 2025. That has meant households already facing an affordability crisis have seen prices increase almost at pace with their incomes. That situation doesn’t look likely to change soon.
The reason for that goes back to the weak job numbers. With company hiring virtually stalled, and employee quit rates at a five-year low, business aren’t under pressure to increase pay levels to attract or retain workers. And with wage levels flattening, the number of people who’ve have taken on second or third jobs just to get by has risen to its highest level in nearly 25 years.
According to Laura Ullrich, director of economic research in North America for job posting site Indeed’s Hiring Lab research unit, those negative employment statistics are now outweighing broader economic growth that some experts think may reach about 2 percent for 2025.
“(I)t still paints a sobering picture of a job market that may officially be turning frigid after a prolonged cooling period,” wrote Ullrich in an analysis of the October and November employment numbers.
Moreover, Ullrich noted that as has been the case for the past half year, specific sectors — especially healthcare, leisure and hospitality, and construction businesses — have been responsible for most new jobs created. By contrast, the majority of other industries — notably manufacturing, tech, and transportation — have held headcounts stable, or cut them.
Should those few actively hiring sectors join the others in halting large-scale recruitment, the overall jobs picture and unemployment rate risk swiftly turning bleaker. Yet even businesses reporting higher recruitment may not be doing that at the paces statistics indicate.
As Federal Reserve chairman Jerome Powell noted earlier this month, current methods for gathering government employment data may generate “overstatement in these numbers.” That means companies that now appear to hiring be actively may be doing so at lower levels than official numbers suggest — meaning the labor market may be sputtering even more than some economists fear.
Federal agencies are planning to swap those data collection practices for more accurate alternatives early next year, which should provide increasingly accurate job readings. But Ullrich warns that switch to more precise tools could result in today’s feeble employment numbers being revised even further downward to reflect the true state of the labor market.
“Until we observe the new methodology and updated payroll estimates, we should remain guarded in our interpretation of these data,” Ullrich wrote of the recent job numbers. “In a best-case world, the labor market continues its languid growth, with a small set of sectors generating a very large percentage of jobs. However, it is also possible that we have lost jobs in many of the months this year, and future revisions will present an even bleaker view. “
The extended deadline for the 2026 Inc. Regionals Awards is Friday, December 19, at 11:59 p.m. PT. Apply now.
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Bruce Crumley
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America’s path out of $38 trillion national debt crisis likely involves pushing up inflation and ‘eroding Fed independence,’ says JPMorgan Private Bank | Fortune
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While optimistic economists argue that America can grow its way out of a debt crisis, pessimists believe the real outcome will be somewhat less popular.
Business leaders, policymakers, and investors are growing increasingly concerned by the United States’s borrowing burden, currently sitting at $38.15 trillion. The worry isn’t necessarily the size of this debt, but rather America’s debt-to-GDP ratio—and hence, its ability to convince investors that it can reliably pay back that debt. It currently stands at about 120%.
To reduce that ratio requires either GDP to increase or scaling down the debt. On the latter end, this could include cutting public spending. This was already tried by the Trump administration, with the Department of Government Efficiency (DOGE) under Elon Musk claiming to have saved $214 billion.
While those savings were drastically lower than promises made by the Tesla CEO when DOGE was first formed, and they’re a drop in the ocean of the bigger U.S. deficit picture, it does reveal the renewed focus Washington is giving to debt.
This will be a prevailing theme for investors as well, according to JPMorgan Private Bank’s outlook for 2026. (The ban serves high net worth individuals.) The report, released today, says there are three issues investors need to bear in mind: Position for the AI revolution, get comfortable with fragmentation over globalization, and prepare for a structural shift in inflation.
It is this final part, a shift in inflation, which is where the debt question comes in.
JPMorgan writes: “Some market participants warn of a coming U.S. debt crisis. In the most extreme scenario, the Treasury holds an auction and buyers are nowhere to be found. We see a more subtle risk. In this scenario, instead of a sudden spike in yields, policymakers make a deliberate shift. They tolerate stronger growth and higher inflation, allowing real interest rates to fall and the debt burden to shrink over time.”
A key snag in the plan is the toleration of higher inflation: After all, this is the remit of the Federal Reserve’s Open Market Committee (FOMC), which is tasked with keeping inflation as close to 2% as possible. While the FOMC could be swayed to take a broader view than its dual mandate of stable prices and maximum employment if a national debt crisis impacted these factors, it may need more than arguments from politicians.
The method of allowing the debt burden to shrink thanks to lower rates is called financial repression, and could have knock-on effects on other parts of the economy over time. For example, Fortune reported over the weekend that America’s housing crisis happened, in part, due to a period of sustained low rates after the financial crisis.
To orchestrate this repression could take some maneuvering, JPMorgan says: “We could see a less straightforward path to reduce the U.S. government’s debt load. Policymakers could erode Fed independence and effectively inflate the debt away by driving a stronger nominal growth environment characterized by higher inflation and, over the near term at least, lower real interest rates.”
The less popular route
Economists have previously described the looming debt crisis as a game of “chicken” to Fortune, as one administration passes the issue on to the next without plucking up the courage to address fundamental spending or revenue-raising changes.
With an ageing American population, any government move to scale back social and healthcare spending would be likely be unpopular enough to prevent it from coming to fruition, the bank says. Likewise, increasing taxes are a sure-fire way to turn off voters.
The report adds: “U.S. tax collections as a share of GDP are near the low end among OECD nations, suggesting ample capacity—if not the political will—to raise tax revenue to reduce debt. Similarly, mandatory spending on entitlement programs such as Social Security and Medicare could be curtailed to ‘bend the curve,’ as economists refer to efforts to slow the pace of future spending growth. But those options may prove politically unpalatable.”
That said, the Trump administration has mustered some “peculiar” proposals for increasing revenue, without too much pushback from the public. One option is foreign cash, with the president claiming his “gold card” visa scheme could generate up to $50 trillion by selling cards to would-be American citizens at a price tag of $5 million apiece. However, America is already home to the majority of the world’s millionaires and the U.S. may struggle to find individuals who could afford such a card.
Then, of course, there are tariffs, which raked in a record $31 billion in August. Debate is rife about whether U.S. consumers will end up ultimately paying for the policy, or whether the cost will be “eaten” by foreign firms. With a lack of data during the government shutdown, there’s no way to see whether that inflationary pressure is being passed through yet.
The good news is, “at the moment, investors seem comfortable financing the U.S. government’s debt,” the outlook report added. At the time of writing, U.S. 30-year treasury yields sit at 4.7%, similar to where they began 2025, suggesting buyers of American borrowing are not yet demanding higher premiums to be enticed.
JPMorgan adds: “U.S. Treasury bond buyers have been lining up, their demand on average 2.6x greater than supply. But the growing debt-to-GDP ratio of nearly 120% of GDP is troubling to most investors and economists. Solving the problem will be tricky.”
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Eleanor Pringle
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Fed Is Expected To Cut Rates Again—but Uncertainty Grows Over Lack of Jobs Data During Shutdown
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The Federal Reserve is widely expected to lower interest rates by a quarter of a percentage point when policymakers meet next week, but concerns are mounting over the lack of reliable employment figures.
Since the start of the federal government shutdown three weeks ago, the central bank has been cut off from vital economic data that the Fed typically relies on to guide its policy decisions. Analysts have compared the situation to a pilot attempting to land a plane blind.
Financial markets are all but certain that the Fed’s Board of Governors will lower its benchmark rate to the 3.75%–4% range during the Federal Open Market Committee meeting scheduled for Oct. 28-29.
Fed Gov. Stephen Miran, recently appointed to the board by President Donald Trump, has been advocating for a larger half-point cut, echoing the president’s calls for more aggressive action.
But Fed Chair Jerome Powell so far has taken a more moderate approach, referring to reductions as “risk management” measures.
Looking ahead, opinions are divided on what the central bank will do come December.
A recent poll of 117 economists conducted by Reuters found that fewer than three-quarters expect another cut before the end of the year.
Fed faces jobs data blackout
The Federal Reserve has a dual congressional mandate to promote maximum employment and keep inflation as close to its 2% target as possible.
But since the nonessential parts of the federal government ceased operations on Oct. 1, official jobs numbers from the U.S. Bureau of Labor Statistics have not been released since early September, leaving the Fed with a murky view of economic risks.
The latest available data indicates that the labor market has softened over the summer, with just 22,000 jobs added in August and the unemployment rate ticking up to 4.3% from 4.2% the previous month.
Figures coming out of the private sector suggest that the job market remains mostly in a holding pattern, with no major fluctuations in either layoffs or hiring.
New inflation report on the way
Meanwhile, the Bureau of Labor Statistics is scheduled to release the consumer price index for September on Thursday, after some furloughed staffers were ordered back to work to compile the latest inflation data.
Economists polled by Reuters expect the report to show that consumer inflation inched up to 3.1% in September from 2.9% in August, injecting uncertainty into the prospect of an additional Fed rate cut at the end of 2025.
Typically, if the Fed observes a sharp slowdown in hiring, it would be inclined to cut the federal funds rate, while rising inflation would make it more likely to delay another rate reduction.
What it means for the housing market
It’s important to remember that the Fed does not directly set mortgage rates, but rather influences them in a more roundabout way by setting the federal funds rate.
However, the information vacuum created by the government shutdown that’s clouding the Fed’s decision-making process could negatively influence the housing market in different ways.
Jobs data informs Fed policy decisions, which anchor the 10-year Treasury and, by extension, mortgage rates. Without that benchmark, it is harder to predict exactly what the central bank will do during its upcoming meetings.
Additionally, not knowing the true state of the labor market compounds the uncertainty already weighing on would-be homebuyers and sapping demand.
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Snejana Farberov
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Growing number of Americans facing prospect of long-term unemployment
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New York — When 41-year-old Emily Groveman is not volunteering at a New York City animal shelter, she’s usually in her one-bedroom apartment looking for a job.
“It’s been impossibly difficult,” Groveman told CBS News. “It’s been almost two years.”
For almost a decade, she worked in hospitality with the NBA.
“All the swag tickets to parties, back of house tours, meet-and-greets with the players, that would all flow through me,” Groveman said.
Groveman then went on to lead a team at a digital marketing firm for about six years. She left in 2023 and hasn’t been able to find another job since. She’s tried everything, she says, from reaching out to her network of friends, to working with a recruiter, to posting resume reels on LinkedIn.
“The job market has been brutal for quite some time,” Groveman said.
For one specific position, she said she went through 13 interviews with 11 different people at the company.
“They were stuck between me and the other candidate,” Groveman said. “And ultimately, they went with the other person, and I was like, ‘I can’t keep doing this.’”
As the rejections piled up, so too have the bills.
“Since March, I’ve been living off of my 401(k),” Groveman said. “… I’ve been dipping into it every month now.”
According to Labor Department data, in August, nearly 2 million people in the U.S. faced long-term unemployment, defined as being out of work for at least 27 weeks. That’s the highest number since 2022, during the pandemic.
“The primary reason we are seeing long-term unemployment getting worse is because of economic uncertainty coming out of the White House,” labor economist Teresa Ghilarducci said.
Fuel has been added to some of that uncertainty recently by the government shutdown and an ongoing flurry of tariffs instituted by the Trump administration on nations across the globe. In early September, the number of U.S. workers filing for unemployment benefits hit about 263,000, the highest mark since October 2021.
Ghilarducci believes that the job market is not going to improve “anytime soon.”
“If someone is looking for work now, it’s going to be tougher, more people looking for the job that you want,” Ghilarducci said. “And more and more businesses being reluctant to hire. It doesn’t mean you should stop, but the market will not ease up, for any time soon.”
As for Groveman, she’s given up on trying to find a job. In December, she plans to move to a Buddhist temple in upstate New York, where she will get free housing for working at a retreat center.
“If you have the ability to work, you should be able to,” Groveman said. “And that’s how the American dream happens. You pull yourself up by your bootstraps, and put in the work, and you’ll be rewarded. But that’s not happening anymore.”
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What to do when you get laid off – MoneySense
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Statutory vs. common-law severance
In every province and territory, there are statutory minimum payments that you are entitled to receive as an employee whose employment is terminated. This is called termination pay. This generally applies after three months of continuous employment and is meant to provide a safety net after you are let go without cause. Termination pay is generally a certain number of weeks of salary per year of service up to a maximum.
Beyond this minimum payment, employers may also offer severance pay. This compensation is beyond the statutory minimum and based on common-law entitlements—basically, what you might get if you went to court. Both employees and employers prefer non-litigious solutions to a termination, and so may agree on a payment that is somewhere in between the statutory minimum termination pay and the common-law severance amount.
Severance pay is not a specific formula, because the potential entitlement can be based on things like someone’s length of service, the type of position they hold, their age, and other factors.
When an employer offers a severance package, the employee is not obligated to take it. They can seek advice from an employment lawyer to understand the offer and whether they should be asking for any variations.
Should you take a lump sum or salary continuance?
Some employers offer a lump-sum severance payment that is payable all at once, while others offer salary continuance where payroll deposits continue for the duration of the severance.
If you have the option to receive a lump sum, you may be eligible to defer some or all of it to a subsequent calendar year. This may be advantageous, especially if it is late in the year, to avoid having a large payment taxed at a high tax rate. Due to Canada’s progressive tax system, you may pay less tax to have the payment deferred and taxed in a subsequent year than added to your current year’s income.
If you have registered retirement savings plan (RRSP) room, you might choose to direct some or all of the payment to your RRSP. In this case, it will be deposited pre-tax, so that the gross amount goes directly into your RRSP. That means you will not get a large tax refund when you file your tax return, as you would were you employed the whole time. It is as if you received the tax refund up-front since no tax was withheld from the income deposited to the RRSP in the first place.
Compare the best RRSP rates in Canada
New EI rules can help
When an employee is terminated, they are generally eligible to collect Employment Insurance (EI) benefits. The federal government introduced a temporary change to EI for new claims in March 2025 in response to the U.S. government’s tariffs on several foreign countries, including Canada. The temporary measure was meant to end on October 11, 2025, but has been extended to April 11, 2026.
There is typically a one-week waiting period after salary continuance ends. For lump-sum separation earnings like severance pay, vacation pay, or sick-leave credits, there is normally a further delay to apply. But under the temporary EI measures, a terminated employee can apply for EI benefits immediately.
Regular EI benefits are generally capped at 45 weeks, but under the temporary measures, a recipient may be entitled to an additional 20 weeks if they are a long-tenured worker. To be considered a long-tenured worker, the applicants must have met two conditions:
- Received fewer than 36 weeks of regular or fishing benefits in the three years before the start of a claim
- Paid at least 30% of the annual maximum EI premiums for at least seven of the 10 years before the year that a claim starts (the EI maximum for 2025 is $695 per week)
Are you still entitled to benefits?
If you had benefits like life, disability, or medical insurance, a termination will generally end this coverage. Life insurance is often extended based on the number of weeks of salary you are paid out. Disability insurance generally ends on your last day of work.
Some group life insurance policies allow you to convert your coverage to a personal policy. This may be advisable if your health is poor, as you may be able to maintain it without having to provide health information to the insurer.
You can purchase your own life insurance policy from an insurer, and this may be preferable if your health is good. Disability insurance is more complicated to replace, because if you are not working, you do not have an income to replace.
Although the loss of medical coverage may be worrisome, it may not be necessary to replace it. Health insurance is not meant to create a windfall where you receive more back from the insurance company than you pay in premiums. To the contrary, the insurer makes a profit when the average policyholder pays more in premiums than they receive back in reimbursements. As a result, rushing to replace coverage may not be advantageous compared to just paying for health-care costs out of pocket when your coverage ends.
Dealing with pensions and group RRSPs
If you have a defined benefit (DB) pension, you may have the option to take a lump-sum payout, some or all of which may be eligible to transfer on a tax-deferred basis to a locked-in retirement account (LIRA). When you forgo your future monthly pension, you need to invest the proceeds to produce a retirement income. Not all pensions allow you to take a commuted value transfer, however, and some limit the option based on your age (e.g., only under age 55).
When interest rates are lower, the lump sums paid out are higher; when interest rates are higher, the payouts are lower. Those best suited to consider a lump sum are investors with a high risk tolerance or a short life expectancy.
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Jason Heath, CFP
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1 in 7 Jobs Are at Risk of AI Automation, SHRM Says
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As AI insinuates itself more deeply into our everyday and work lives, a new report underlines the paradigm-breaking impact the technology may have on the job market. A huge proportion of all U.S. workers are at a high risk of being replaced by automated AI systems. This represents a threat that could drive unemployment up and rattling the economy. But a separate report by the World Economic Forum suggests that one way to mitigate against this outcome is a dramatic reskilling and job redesigning effort. All of this news could feed into your plans for deploying AI tools in your company.
The new report, from the world’s largest HR association, the Society for Human Resource Management (SHRM), warns that 15 percent of all American jobs (just above one in seven, and affecting 23.2 million people in total) are at risk of being displaced by automatic processes, HRDive notes.
The types of job that most likely to be affected is one where at least half of the task list can be automated. This includes all forms of automation, including physical tools like robotics as well as artificial intelligence. This means the threat is nuanced, and, as many reports before have shown, some types of job are more at risk than others. For example, SHRM’s report estimates 39.7 percent of software development work is highly automated and at risk from AI, as is a similar share in “mathematical” occupations (financial analysis, perhaps). But just 7.3 percent of the work in the “education and library” professions is automated.
The report also suggests that 7.8 percent of U.S. work product — about 12 million jobs — is already at least 50 percent completed using generative AI tech.
This might raise the specter of mass unemployment, with images not far removed from Great Depression-era poverty and unrest swirling in your head. But SHRM also notes that a “significant majority of employment faces nontechnical barriers to automation displacement.”
This means that many types of work include processes, preferences, physical issues and so on that prevent the job being automated, and thus protects them from AI—at least for now. These types of work have emphasize “interpersonal skills and/or relatively low-tech tools,” such as “many education and health care occupations.” SHRM says “client preferences are the most common” reason for not worrying about AI encroaching on these jobs: people still prefer dealing with people.
Another perspective on the AI threat was expressed in a new report from the World Economic Forum, addressing the new AI “dual workforce challenge, of “balancing overcapacity and talent shortages.” The report cites a global survey of C-suite executives, of which 92 percent said they had up to 20 percent “workforce overcapacity,” meaning they have more workers than they need . By 2028 that figure is expected to rise to 30 percent overcapacity by about half of the leaders surveyed. At the same time, 94 percent of the leaders say they face “critical” AI talent shortages.
The WEF report suggests the issue affects many workplaces already, and the shift is only going to get more pronounced as AI technology improves and becomes more capable and widely used. What was once AI “experimentation” is now “structural disruption,” the report says.
The answer to the issue, the WEF says, is “reskilling at scale,” combined with “redesigning roles for human-AI collaboration,” and “embedding workforce planning into core strategy.” The report basically calls for using HR departments to smooth the transition between the “legacy” way of working (without AI) into the modern way, as companies integrate AI. Agentic AI has the promise of “workforce empowerment,” and can “boost efficiency, resilience and competitiveness,” the WEF thinks while companies “stuck in pilot mode risk falling behind.”
The WEF thinks it’s time for a dramatic upheaval in the workplace, pivoting around the skills needed to operate AI tools. Think of it as the equivalent of the arrival of PCs and printers in the office: typewriters were no longer necessary, and a whole new skillset among workers of all types was needed, The adjustment required rethinking jobs and also reskilling workers on the new tech en masse.
What’s the takeaway for you and your company?
Simply that if you’re deploying AI tools across your company — without the intent of outright replacing any of your workers — you need to make your plans very clear, and communicate the goals you’re aiming for by using AI. Your HR team may also need extra budget, time and direction in order to plan a large-scale ongoing, education program to teach workers how to use AI tools to boost their efficiency. You could also consider upskilling talented workers who’ve had their time freed-up by AI, by giving them expanded roles — an option that could help grow your business.
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Kit Eaton
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What furloughed federal workers should know about managing their finances during shutdown – WTOP News
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Federal workers checking their finances to see how they’ll fare if the government shutdown drags on may find themselves fighting gut-wrenching anxiety.
Federal workers checking their finances to see how they’ll fare if the government shutdown drags on may find themselves fighting gut-wrenching anxiety.
And Kathleen Borgueta, a former federal employee, knows exactly how that feels.
She lost her job at the U.S. Agency for International Development in January, and had to scramble to deal with a host of new expenses as the mother of a newborn son.
“I would make sure you have all of your HR forms saved,” Borgueta said, adding that federal workers that are currently being furloughed should make sure the documents are easily accessible.
Borgueta founded Pivoting Parents, which works to help former federal workers make the transition to new careers.
She also said federal workers should be familiar with their own benefits, especially if they find themselves out of a job.
“I know countless people who didn’t get the amounts they thought they were going to get for vacation payouts and things like that,” Borgueta said.
Don’t hesitate to contact your landlord or mortgage company to let them know you are experiencing interruption in pay, she said.
Reach out to utility companies — many in the D.C. area have posted notifications that indicate customers impacted by the shutdown can get help with payment options.
“Verizon, my internet, was willing to work with me when I told them that I was a displaced worker,” Borgueta said.
As a new mom, Borgueta was facing medical bills, and advised those in a similar situation to inquire about payment options and whether you can get those bills reduced.
“It is well worth negotiating — talking to a real person and asking about payment plans,” she said.
Aside from fiscal fitness, Borgueta advised furloughed federal workers to tend to their mental health.
“I’ve been through government shutdowns. Sometimes they’re short, sometimes they’re long,” she said. “Make sure that you have the supports that you need to take care of yourself and to take care of your family.”
Resist the urge to withdraw and shoulder your burdens on your own, she said.
“I would really recommend leaning on in-person networks — people you do know who are also going through these experiences — and not just doomscrolling,” she said. “Ask for help.”
Borgueta said she leaned heavily on in-person communities, and said the D.C. region has a wide range of resources, from career coaching to accessing certification for in-demand skills.
Filing for unemployment benefits: Nuts and bolts
Michele Evermore, senior fellow at the National Academy of Social Insurance, a nonpartisan, nonprofit organization, told WTOP her advice for former federal workers when applying for unemployment insurance.
“Be prepared to provide the last 18 months in pay stubs plus your SF8 form and your SF50 form,” she said.
But she said furloughed workers shouldn’t panic if they can’t access those forms.
“You can file an affidavit confirming what your wages were, but it’s just a little more time consuming than a regular unemployment insurance claim,” Evermore said.
Evermore said unemployment benefits will not cover a furloughed workers’ living expenses. Weekly benefits range from $440 a week in D.C. to $378 a week in Virginia. In Maryland, weekly payments are as high as $430.
“That’s not a lot of income, but it’s better than zero,” Evermore said.
After filing for unemployment, Evermore said, expect to wait.
“It will take a while because, in general, timeliness means you get paid within two to three weeks,” she said.
One thing that anyone receiving unemployment benefits should realize is that those benefits will be taxed.
“States will give you the option of withholding now or paying later. I would really encourage people to just withhold now and make sure you’re not stuck with an unexpected tax bill next year,” she said.
One last bit of advice, said Evermore: keep your unemployment benefits password.
“In some states, if you don’t keep your password for the unemployment insurance system and you get logged out, you’ll have to actually call and get mailed a password. So make sure you keep that someplace safe,” she said.
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© 2025 WTOP. All Rights Reserved. This website is not intended for users located within the European Economic Area.
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Kate Ryan
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The Gen Z hiring nightmare is real, but AI is a ‘lightning strike’ not a ‘house fire,’ Yale economist says | Fortune
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Especially alarming to many has been AI’s effect on entry-level jobs. A blockbuster Stanford study in August was especially rattling, as it claimed to find a “significant and disproportionate impact” on entry-level jobs most exposed to AI automation—like software development and customer service—have seen steep relative declines in employment. This came out close to the MIT study that said 95% of generative AI pilots were failing and the somewhat sudden realization that AI could be building toward a bubble. Even Federal Reserve Chair Jerome Powell sees something going on, commenting that “kids coming out of college and younger people, minorities, are having a hard time finding jobs.”
But according to a new study from Yale and Brookings researchers, these instances are “lightning strikes,” as opposed to “house fires,”. The U.S. labor market just isn’t showing any signs of broad, AI-driven disruption, at least not yet.
Martha Gimbel, a Yale economist and the paper’s lead author, hopes that understanding this data helps people to relax. “Take a step back. Take a deep breath,” Martha Gimbel, a Yale economist and the paper’s lead author, told Fortune. “Try to respond to AI with data, not emotion.”
No apocalypse yet
The new study examined multiple measures of labor market disruption, drawing on Bureau of Labor Statistics (BLS) data on job losses, spells of unemployment, and shifts in broader occupational composition. The conclusion: there’s movement, but nothing out of the ordinary.
While the mix of occupations has shifted slightly in the past years, the authors stress that this change is still well within historical norms. Right now, the forces driving those shifts appear to be macroeconomic rather than technological.
“The biggest forces hitting the labor market right now are a slowing economy, an aging population, and a decline in immigration—not AI,” Gimbel said.
It’s easy to conflate noise in the economy with the impact of AI, particularly for younger workers, who may already be feeling the pinch from a cooling job market. But Gimbel stressed that these effects are “very specific impacts in very targeted populations,” but there aren’t any broad impacts of AI for young workers, which are more consistent with a macroeconomic slowdown.
Economists — including Fed Chair Jerome Powell — have described the current labor market conditions as a “low hire, low-fire” environment, where layoffs are rare, but so are new opportunities. Recent college graduates have been taking the hit: they are struggling to find entry-level roles in white-collar sectors like tech and professional services, and the youth unemployment rate has climbed to 10.5%, the highest since 2016. But the effect has hit older workers, too, more than a quarter of unemployed Americans have been out of work for over six months, the highest since the mid-2010s outside of the pandemic years.
Exposure to AI does not mean job loss
It’s not surprising, then, that many workers assume AI must already be responsible. But Gimbel argues one of the biggest misconceptions is conflating exposure to AI with displacement. Radiologists illustrate the point. Once seen as automation’s prime victims, they are more numerous and better paid than ever, even as their workflows rely heavily on AI-powered imaging tools.
“Exposure to AI doesn’t mean your job disappears,” she said. “It might mean your work changes.”
The same applies to coders and writers, who dominate AI adoption rates on platforms like Claude, the researchers found. Using the tools doesn’t automatically train away your livelihood—it could simply reshape how the work is done.
Molly Kinder, Gimbel’s co-author at Brookings, added another layer: geography. Americans are used to thinking about automation as something that devastates factory towns in the heartland. With generative AI, Kinder said, the geography is flipped.
“This is not your grandparents’ automation,” Kinder told Fortune. “GenAI is more likely to disrupt—positively or negatively—big cities with clusters of knowledge and tech jobs, not the industrial heartland.”
In her view, cities like San Francisco, Boston, and New York, dense with coders, analysts, researchers, and creatives, are far more exposed to generative AI than smaller towns. But whether that exposure turns into devastation or growth depends on the future.
“If humans remain in the loop, those cities could reap the most benefits,” Kinder said. “If not, they’ll feel the worst pain.”
The key, she emphasizes, is that exposure doesn’t tell us whether jobs will actually be eliminated, rather, it only tells us which tasks could change. The real story will depend on whether companies treat AI as a helper or as a replacement.
Lightning strikes, not a house fire
Kinder, like Gibbel, stressed that diffusion takes time. Even as AI systems improve quickly, most organizations haven’t redesigned their workflows around them.
“Even though it feels like AI is getting so good, turning that into change in the workplace is time-consuming,” she said. “It’s messy. It’s uneven.”
That’s why the Yale-Brookings analysis is deliberately broad. “It can tell if the house is on fire,” Kinder explained. “It can’t pick up a stove fire in the kitchen. And right now, the labor market as a house is not on fire.”
That doesn’t mean there’s nothing to see here, however.
Kinder called today’s changes, like the ones the Stanford study picked up, “lightning strikes” in specific industries like software development, customer service, and creative work. These early jolts serve as canaries in the coal mine. But they haven’t aggregated into the kind of disruption that reshapes official job statistics.
“Our paper does not say there’s been no impact,” she said. “A translator might be out of work, a creative might be struggling, a customer service rep might be displaced. Those are real. But it’s not big enough to add up to the economy-wide apocalypse people imagine.”
Both Kinder and Gimbel said they expect the first clear, systemic effects to take years, not months, to appear.
What comes next
If and when real displacement arrives, both authors believe it will come from embedded AI in enterprise workflows, not from individual workers casually using chatbots.
“That’s when you’ll see displacement,” Kinder said. “Not when one worker turns to a chatbot, but when the business redesigns the workflow with AI.”
That process is beginning, as more companies integrate AI APIs into core systems. But organizational change is slow.
“Three years is nothing for a general-purpose technology,” Kinder said. “GenAI has not defied gravity. It takes time to redesign workflows, and it takes time to diffuse across workplaces. It could end up being phenomenally transformative, but it’s not happening overnight.”
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Eva Roytburg
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Why are so many Black women losing their jobs? An expert blames three factors.
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There’s a problem in the job market, but if you don’t dig below the surface in the latest monthly employment report, you might not see it. The overall unemployment rate is 4.3% and in the last year it barely moved.
But the data tells a different story when it comes to Black women and employment. Their unemployment rate has jumped to 6.7% which one expert calls a warning sign.
Fadjanie Cadet was laid off in April of this year, and her experience is all too familiar right now. She is a highly educated Black professional, who is now unemployed, and worried about her future.
She said the anxiety and uncertainty of what comes next are the toughest part.
“Thinking about financially, what the implications would be for me and for my family. But I think one of the other most interesting impacts for me, particularly, is because of the work I was doing,” Cadet explained to Cole.
Cadet was the Director of Diversity and Inclusion for a global research and advisory firm.
Retreat from DEI
That’s one of the factors behind more than 300,000 thousand Black women leaving the workforce between February and April — corporate America’s retreat from DEI, or Diversity, Equity and Inclusion.
“It’s been really disheartening … the information that came out for The Bureau of Labor Statistics, with about 320,000 Black women leaving the workforce, between February and April, I believe. But that’s going to continue,” said Aba Taylor, the President and CEO of YW Boston.
YW Boston is an organization dedicated to creating more inclusive work environments.
“Long-term career women in the federal government suddenly just being told they need to go for no reason,” Taylor said.
She highlights a second factor: small businesses cutting back.
“Small businesses are really being impacted by the tariff policies. Black women getting hired through small businesses is a factor to the unemployment rate, certainly,” Taylor said.
Federal government layoffs
The third factor Taylor pointed to is layoffs in the federal government. There are more Black women working for the federal government than in the private sector.
That’s why Rep. Ayanna Pressley is using a letter to voice her concerns to Jerome Powell, the Chairman of The Federal Reserve Board of Governors.
“What I’m calling on the Fed to do is collect the data, to analyze the data and to come up with a plan. 300,000 Black women have been pushed out of the labor force in the public and private sector — and that is a crisis!” Pressley exclaimed.
She wants a response from the Fed, no later than Sept. 30.
“An economic indicator”
“Black women have always been an economic indicator for what that means for everyone else. We have been the canaries in the coal mine. So, it is advantageous — and economists will support this — for us to better understand exactly what is happening to Black women and then do something about it,” Pressley said.
YW Boston isn’t waiting for the federal government to help.
“We have a lot of programming coming up this fall to kind of focus specifically on Black women, women of color, including another webinar in October that focuses on women of color in the workplace and what is the status,” Taylor said. “We also have an advocacy training that we’re planning specifically for women of color to help uplift their voices, help them navigate the political scene we’re in right now.”
Taylor said they are also working on putting a leadership program together for 2026.
They’re not alone in this space. Boston While Black, a networking group for Black professionals, is using its app to help members share jobs and network. It’s putting a heavier emphasis on its career center, where employers can post opportunities and members can connect with them directly.
“We’re trying to be that connector and help people, these two sides that are trying to find each other, make those connections,” said Sheena Collier, the Founder and CEO of Boston While Black.
As for what’s ahead for Cadet, she says right now her focus is helping organizations.
“Tie DEI principles to org-effectiveness work. People are dealing with so much disruption now: societal, political, technological disruption and right now organizations need leaders that have met the moment and can really help lead through change. So, right now I’m looking for different opportunities that will be more broad and integrating culture, learning and employee experience,” said Cadet.
We checked in with Rep. Pressley’s office Monday and they have yet to receive a response from the Fed.
If you are wondering what you can do to positively impact change, Rep. Pressley encouraged community. She says this is the time to really show up for one another. She also mentioned plans to release more resources in the days to come.
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