Moody's Talks - Inside Economics - Jobs: Soft, Stable, or Something Else

Episode Date: May 8, 2026

The Inside Economics crew dives into the April employment report. Despite better-than-expected headline job growth, they debate the best way to characterize the current state of the labor market. The team agrees that despite a still-low unemployment rate, there are reasons to be concerned. The stats game proves particularly difficult, but delivers key insights about the labor market, and also provides some key figures to watch moving forward. Questions or Comments, please email us at [e-mail]. We would love to hear from you.  To stay informed and follow the insights of Moody's Analytics economists, visit Economic View. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Welcome to Inside Economics. I'm Mark Sandy, the chief economist of Moody's Analytics. I'm joined by my two trusty co-host, Chris Dorene's Mercedee Natali. Hi, guys. Hey, Mark. Hi, Mark. Let's bring down. No, C.

Yeah, yeah. Before we talk about the summit where we saw each other, let's bring in Dante, Dr. De Antonio. Hey, Dante. Hi, how are you? Good to have you on board. And today is Jobs Friday. So always Jobs Friday synonymous with Dante on the podcast. So what did you guys think of the summit in San Diego? We were all there. I felt pretty good about it, but not to color your views. What do you think? What did you think? I thought it was great. Yeah. Yeah, very positive. What's your call sign, Marissa? Juggler.

Juggler. Apparently. Juggler. You go for the jugular in the game in the stats game. And Chris was dice. Here to win. Yeah, yes. I still don't know where that came from, but I'll take it. I don't know, right? It should be crypto. Oh, it could have been crypto. Could have been crypto. Chris Crypto Duretis. Oh, that's a good one.

What call sign would you give Dante? Doctor. Doctor. Oh, of course. Doctor, really. Someone asked me why you call him. Someone at the summit asked me, why do you always call, why does Mark call him Dr. D. Antonio, is that because he insists upon it? Of course. It sounds like a demand I would make, right? You know, you must refer to me as doctor. That's the, you know. Well, I guess this is a bit of inside baseball because the listeners who weren't at the summit have no idea what we're talking about, right? We, we... We keep mentioning it on the podcast, so presumably they know it's a big meeting that we just had. We just had, right? And, I mean,

What was my call sign? Baseline. Oh, baseline. I think Sarah came up with that, didn't she? She did. Yeah. But you, Marissa, you came up, I thought, was a pretty good one, Z score. Z score, Z score, Z score.

Or Z stat. Or Z stat. The Z score is a real thing. It thought it would be too technical. Too technical? That's why John didn't pick it, yeah. Oh, I see. John the MC of the whole son.

summit, right. Dante, do you know what the Z score is? I do know what a Z score is, yeah. Do you know what a Z score? I mean, I teach intro statistics, so I mean, I teach it every semester. So what's the Z score? How do you, how would you teach the Z score? I mean, it's a way to normalize a value, right? You take a mean from some distribution and then you normalize that into a standard normal distribution through a Z score. I think that should be my call sign. I like that. There you go. I normalize things. There you go. Tag one, too.

Anyway, it was great. We were all in San Diego. We were there for a few days. Attendance was fantastic. The venue was great. Typical, beautiful, San Diego weather. Did you guys get outside at all? I know Marissa was out on her outrigger canoe.

She was giving lessons. Between sessions, yes. Between sessions. I think I didn't bite it, right? What's going on? What's that, Chris? I think that's how she got there, didn't she, a canoe from... That was the reporting.

That was the reporting. There was a drone that was reporting on citing this outruder canoeist coming down from Orange County. And reportedly, that was Marissa making her way to the conference. That was me. Took me a while. You know, let me... I have one experience with the Pacific Ocean in that area of California. When my kids were young, we got on a catamaran.

Of course, I had no idea to do it. We had a guide, and we went out into the ocean. And there was this, we got into the middle of this pod of porpoises, and they were everywhere. It was just unbelievable. Is that common? Yes. Where I live, it's very common. It's actually this area in Dana Point is a, well, two things.

It's a whale heritage site, so it has the most biggest migration of blue and gray whales. You can see them just off the beach a lot. And the dolphins are all the time everywhere and huge megapods of dolphins where there'll be like hundreds or thousands of them. And again, you can see them right off the beach. You don't even have to be out on a boat. Very memorable. It was just amazing. They were everywhere around the catamaran.

They were just, they're having a lot of fun. Yeah, they're very playful. Really pretty cool. Okay, well, let's get down to business. and of course the business is the jobs numbers for the month of April. They came out this morning. And Dante, you want to give us a rundown? I can do that.

So the headline is better than expected on the sort of overall payroll jobs front. I think consensus expectations going into it were somewhere in the 60 to 70,000 job mark. And headline came in at 115,000 for April. Pretty concentrated amongst industries, health care, not surprisingly, still. the biggest driver of that top line gain. And then you had transportation and warehousing and retail as maybe sort of the dark horses there. They accounted for a little over 50,000 jobs gained in April. So not a whole lot of action outside of those three industries, you know, a little bit of movement up and down elsewhere, but those accounted for most of the gain. Revision were pretty

minor. The net revision to the prior two months was down slightly. It was down about 15,000. So not a huge movement in the prior two months. Average job growth over the last three months is now right about at 50,000. So I think, you know, probably still a little bit higher than maybe we think, you know, trend job growth is. But we're still, you know, sort of coming off this, this wave of jobs being up and down month to month. This is the first time we've had two months of consecutive job gains in about a year.

Over the last year, we had had this flip-flopping of gains and losses pretty consistently. So we've broken that cycle here with gains in March and April. wage growth was pretty weak, right? It was only up about 0.2% in April year-over-year growth didn't change a whole lot. It's up, you know, just over 3.5% over the last year. So it's been weakening. Yeah. So you said the trend job growth is around 50K.

Is that what you said? Well, over the last three months, job growth is averaging 50K. I think the trend is, I think trend is probably below that, right? If you look over the last year, job growth is only averaging about 20,000. thousand. Right. And when we say trend, you mean abstracting from the monthly vagaries of the data, strikes, weather, so forth and so on. You cut through the volatility, get to the underlying trend. You're saying it's somewhere around 25K, is what it sounds like you're saying. Yeah, I definitely think it's between the, you know, sort of 20 over the last year and the 50 that we've

seen more recently. Okay. Yeah. Okay. So, so, so, so, so, so if If I said 25 to 50K, you wouldn't argue with me. No. Something like that. Okay. You said that the job growth across industries was concentrated, more or less so than has been in the past year. It felt like a little broader base to me, didn't it?

I think if you just look at the sort of top line industries, if you look at those three industries, you got about 100,000 jobs added just in those three industries and you had 115,000. I mean, there weren't many industries that declined, I guess, which is probably better news we've seen in recent months, right? There was only really two major industries that posted declines. And then you had some very small gains across other industries. So I think maybe in that sense, there was less

bad news across the industry spectrum because you only had information in finance that posted declines, which we've had more industries in the past. Actually, manufacturing was down to slightly. So healthcare, retail, in couriers, transportation, they were, they were the bulk of the job growth. And you're saying the rest of it was kind of a wash. Manufacturing was down a little bit? Yeah, it's down 2000. Okay. And construction was that, I think that was up, wasn't it? Yeah. Yeah. I think nine or 10,000, yeah. Nine or 10,000. Okay. Okay. Chris, I saw you shake in your head when I said it felt less concentrated. Is that your sense of things, too? Yeah. Well, yes, but to Dante's point, it's not still.

It's broad-based. It's just not, it was kind of scary. I think the diffusion index is now over 50, right? So, but just barely, right? The diffusion index being the percent of industries covered by the Bureau of Labor Statistics is over 50 percent of the industries and the, are experiencing positive job growth in the month. Yeah. Okay. Okay.

All right. So should we go on to the house? That was the payroll survey, the survey of businesses. You want to go to the household survey? And then we'll come back and say, you know, what is it? all mean, but what about the household survey? Sure. I mean, the household survey, I don't think you can argue, it was a little bit more downbeat. I mean, the headline is that the unemployment rate was unchanged. Although, I know

you'll ask me, so I'll get ahead of it, right? If you look at the unrounded unemployment rate, it actually did rise quite a bit. It was up 0.08 or 0.08, right? So unrounded went from 4.26% to 4.34%. So it's about as much as it can rise without the official rate moving higher. Right. So that's the good news. I think the bad news is the continuation of the story that labor force participation is still falling, right? Employment in the household survey declined. Unemployment was up. So I think other than the unemployment rate staying steady, it's sort of slightly bad news in the rest of the household survey. Okay. The participation rates, that's what caught my eye. It's been really sinking here on a consistent basis for at least the past year. and I think we're down not quite a percentage point in one year, that's a lot. That is a big move, isn't it, in the participation rate? It is, yeah. I mean, if you look outside of the immediate aftermath of the pandemic, I mean, participation hasn't been, the headline participation rate hasn't been this low since the 70s, right? I mean, it's very low, which, I mean, is not unexpected, right? We know that some of that is just demographic challenges, but I think it's happening faster than we probably would have thought.

Right. And I often say, okay, if the participation rate had not declined over the past year, but it just remained constant, stable, that would argue that the unemployment rate would be meaningfully higher. So people can lose their jobs and they're unemployed, but if they step out of the workforce, participation rate declines. They're not captured in the unemployment rate, but that's still a measure of slack in the labor market. And so therefore, if you, a whole whole, the participation rate constant, the unemployment rate would be closer to 5%. Is that fair what I just said and did? I think that's fair. I mean, I think there's the open question. I think we've talked about before is where is that lack of participation coming from and does, you know, do we care as much, right? Because if you look at prime age participation, it didn't move at all, right? It's still steady. It's still close to its high for the cycle. It's really held up quite well. So, you know, the sort of the, where participation is lacking is in that under. 25 age group and then amongst older workers, right? So that's where we've seen all the movement.

Right. Okay. Not that that doesn't matter, but does it matter a little bit less than if it was, you know, prime age participation? And it was that the case this past month as well. It was still the older workers where we saw the decline in participation. That's where it's happening. Yeah, prime age precipitation didn't move at all. And it's, yeah, it's only down two tenths, I think, from its high point for this cycle. I mean, it's barely moved. Okay. And the kind of the conjecture there on the participation rate for older workers is perhaps AI, that AI might be playing a role here, that these workers do not want to invest, especially because at their end of their career, they don't want to invest in learning artificial intelligence, which many companies are now requiring.

Is that, does that make sense to you, that, that conjecture? I certainly think that could be part of it. I also, I mean, we've talked about, you know, we've got record high equity prices, right? I also think you've got maybe older workers leaving voluntarily, right, because they're in a better financial position than they were a year or two ago. And so they feel comfortable stepping out of the workforce now. Yeah, I think coming out of the pandemic, we talked about, you know, some older workers sort of holding on a little bit longer, trying to sort of replenish those nest eggs. And maybe now we're seeing the other side of that. Could some, and I don't know how to connect these dots, but, you know, we know immigration is way off too.

Could that be playing a role here, too? I don't know how that would work, but just to ask, can you, can you, can you? connect those dots? I mean, maybe amongst the younger age cohort. I would imagine immigration helps, you know, fuel some of that participation amongst, you know, younger workers. And so if you're losing that, you might be losing, you know, some of the sort of younger age cohort that's more likely to be in the labor force, potentially.

Okay. Okay. All right. So add it all up, what does it mean? I mean, how do you feel, has your feelings about what's going on in the labor market, the economy more broadly changed as a result of this report? I don't think so. I mean, I think job growth is still sort of roughly where we expected it to be, you know, sort of weak but positive, which was our forecast for 2026. And I don't know, this hasn't really changed that story. And if anything, I think, you know, we were expecting that the unemployment rate might creep a little bit higher throughout the course of the course of the year. And it obviously didn't move this month officially. But it feels like it, you know, maybe trending in that direction where it could tick a little bit higher over the, you know, course of the rest of the year. Okay. So you gave us your estimate of the trend underlying monthly job growth, 25 to 50K. What do you think?

the break even is. That is the rate of job growth consistent with creating enough jobs to maintain. I always say stable unemployment, but let's say stable unemployment and stable participation. I mean, it feels to me like it has to be pretty close to that same range. I mean, just because we haven't seen the unemployment rate move a whole lot, but to your point, participation is edging lower. So, you know, maybe it's maybe we're not quite meeting that threshold. So maybe that's a touch higher and, you know, job growth isn't sort of fully delivering.

I still don't think they're that far apart right now. Yeah, I don't think we're, I think they're pretty well in balance to me. Okay. I don't want to take anybody's stat. We are going to play the statistics game in a few minutes. But what was the household survey estimate of jobs based on the payroll definition? So the payroll survey has a different definition of employment than the household survey. And if you could put the household survey on a payroll basis, what was the change?

It was actually positive. It was up, I think, 115 or 118,000. Oh, so pretty close then. It does reverse. You know, the unadjusted, there was a decline of more than $200,000 in the household survey. But if you adjusted, it was positive. And, yeah, it was close to the payroll survey number.

Right, right. One of the thing that bothers me is, you know, we look at participation rates, but I also would like to, if you look at the overall level of labor force, and I know that's hard to do because you have these big jumps in January because that's when the Bureau of Labor Statistics benchmarks to new population controls. In the last couple of years, we've seen some pretty big moves up and down. What do you think labor force growth is now? I mean, abstracting from, you know, those measurement issues. I mean, it feels like it's zero at best right now. Yeah. I mean, right. Close to zero.

Yeah. Okay. All right. Okay. So, bottom line, it's, it's, everything is, how would you characterize the labor market? It's, I don't want to put words in your mouth. How would you characterize it? It's, it's fine.

You know, I get, it's, you know, it's not good, but it's not bad. It's about as good as we can hope for, I think, at the moment. Maybe that's a better way to say it. Because of the labor force. Because of the labor force and because of all the other uncertainty. Stuff that's going on. I don't think there's any reason to think job. growth is going to accelerate right now. And so as long as it stays positive, I think that's about as good as we can hope for.

Okay. One more question, and we'll move on. I'm curious what Chris and Marissa think. The war, the Iran War, you know, when the Bureau of Labor Statistics did the survey, that payroll in the household survey, it was in the middle of April. So the war had been on for six weeks, you know, five, six weeks. And you, you know, if it was going to have an impact, you thought maybe it would start to show up in the April job numbers, and it did not. We got a, you know, a good increase in jobs, both in the payroll and the household survey on a payroll basis. Are you surprised by that? Or do you think it's not going to have an impact or you think it's coming or how do you think about that? Yeah, I think I'm a little bit surprised. I thought it would, you know, at least have a slight negative impact, and it certainly doesn't look like that's showing up anywhere yet. I mean, it's hard to know what the counterfactual is, right? Maybe job growth would have been stronger

in April had the war not been going on, so it's hard to know for sure. But, you know, if anything, I think it's a little bit counterintuitive. Transpiration and warehousing feels like an industry where you might expect to see some of that impact from higher fuel prices, although the gain this month was exclusively amongst couriers, and that almost certainly is a seasonal adjustment effect, see if you look at the data. So I don't think that's a sign of strength that transportation where housing was up, but it's also not falling either.

So that to me doesn't scream that there's a huge impact from the war that's going on. Right, right. Okay. All right, let's move on. Marissa, you guys were colleagues at the Bureau of Labor Statistics, weren't you? Did you guys, I can't quite remember.

We didn't overlap with each other. You didn't overlap? No. Dante came after you or before you? He's very young. Oh, he's very young. Got it. Thank you for that.

Appreciate it. Got it, got it. But what do you think? Anything else to add to Dante's rundown? And what's your interpretation of the data? I mean, the only thing I would add is I agree that we might be seeing some seasonal things going on here that are adding to the strength of this report. He mentioned couriers. There was another big gain within the retail sector of building materials and gardening, outdoor supplies.

and we know that that's highly seasonal within retail. So that could be overblown a bit too. It was very, very strong. So there are some things that look really strong that could be seasonal in overstating this a little bit. But, I mean, you know, things seem to be maybe stabilizing a bit here. So I'm heartened by that, at least. And yeah, I will just note I was looking at participation that there's been a pretty sharp decline in participation for people's 65 and older. And there have been in the past few months. So, but as he mentioned,

prime aid participation is still near a record high. So that's good. Hmm. Okay. So, so, so you, it sounds like you'd characterize the labor market the same way Dante would, as, as, what's the word you, I, it's not okay. It's not going to use the word stable. Stable. Not, not good. Not bad, not good. I actually don't think it's stable.

It's kind of volatile, right? Like, I feel like the past few months have been sort of up and down and all around with a lot of this. There's a lot of bouncing around in the data. So you really do have to take kind of a like three-month average of everything. But if you do that and you're getting 50,000 jobs a month, that seems to be enough to keep the unemployment rate where it is. Yeah. It's weak-ish. It's weakish. It's narrow, for sure, right? It really is still just health care predominantly. But, you know, the unemployment rate seems stable. I really need a the thesaurus. Unchanged. So Dante says the underlying trend of monthly job growth is 25 to 50K. He actually would like me to say 20K, but I just don't.

Just, you know, come on. Give me a feeling. It's fine. 25 to 50K, that feels easier to say. Annie's saying that the break-even, the rate of job growth consistent with stable, slack in the labor market. Let's broaden this out. It's not just unemployment.

It's participation as well, but slack in the labor market is about the same. You're saying, even despite the decline in participation, you're saying, Dante, it's 25 to 50K, right? Yeah. Okay. What would you say, Marissa? So what's the underlying trend rate of monthly job growth? I agree with the range he's in.

I think I'm higher up in that range for both things. So I'm more closer to $25 than I am to $25, yeah. Okay. And break even is same? Same, yeah. 25 to $50K. Okay. All right.

Chris, what do you think? Yeah, I agree with Mercedante, not a whole lot to add. We didn't touch on average hourly earnings. That decelerated a little bit to 3.6% year every year. Right? So not terrible, but not great in the context of rising inflation. So that's certainly something that caught my eye. Right, right, because inflation, I mean, I think the consumer expenditure deflator,

that measure of inflation is in the low threes, right? It's like year over year. It's like, I don't know, 3-2, 3, 3, 3, 3, somewhere in there. Right. So what you're saying is that real, absolutely. average hourly earnings. So after inflation is closing it on zero here is what you're saying. Yeah, on average, right? On average. Which means that there are plenty of folks who are negative, right? They're negative. They're not. And we know those are the lower income folks. If you buy into the

wage data from the Atlanta Fed, which breaks it out by the wage distribution, it's folks in the bottom part of the distribution that are experiencing the weakest wage growth. Yeah. That's right. You must have come to my session. I did. I did come to your session. Yeah, and you have some pretty cool data and some pretty cool charts that I need to digest. Yeah, so I gotta really think about it.

Yeah, you guys did a great job. The only thing about your session I didn't like, was it your session? No, it was Merced's set. It was Mersandte's session. You know what I didn't like? That squeaky platform, it was driving me out of my mind.

You guys didn't notice? You walked around a little bit, it was squeaking as you walk, no? I was too locked in to... Yeah, I think I didn't even, I couldn't hear it over the sound of my own voice, I guess. I don't know. I didn't really notice that I was focused on what I was saying.

Chris, did you notice it? It didn't really bother me. I noticed it, but it wasn't, I got past it. I was having a hard time getting past it. I was sitting there thinking, should I say something? Or should I not say something? Should I say something? Should I not say something?

You could have said something. I didn't say anything because I was thinking maybe it's just me. I was looking around as anyone else bothered by this and everyone was very attentive should I have said something Dante?

I wouldn't have cared if you told me to just stop moving or get off the platform you know just get down on the floor that's fine whatever but somebody noticed

because Chris when you came up and did your session with Matt Collier you did not go up on the platform and that is because of the squeaking right

no? Yes oh is that why you didn't stand on the platform yeah so we were We allowed them to shine, Marissa. We took the fall.

We got the squeaking out of the way. Right. I don't want to be... I don't want to be critical. I'm not being critical. I don't... Because it was a great session, and the whole thing was...

And the squeaking wasn't our fault. I did... I did build the platform that morning. It was kind of your fault. It was kind of your fault. Dante, you built the platform? Yeah, that was my first job of the morning to build the platform. Yeah, so I'll take the fault.

That's fine. No, no, no. It was kind of your fault because you guys are movers. You guys move back and forth all around. You know, you're not stayers. You know, I'm a stayer. I don't, you put me, plant me in one place, I don't move. But I feel like I needed to be elevated in that room.

You know, that's why I wanted to stand on the platform. Yeah, no, it made sense. It made sense. You could look down on everybody. I'll do better next time. Yeah, yeah. So, Chris, I don't know, did I get your, what's your rate of underlying trend job growth?

What do you think it is? Pretty close to Dante, I'd say 30,000. So 25 to 50K somewhere in there. Yeah. And on the low side, on the low side. Yeah. And on, in terms of break even, I'm sticking with my model, which says 35,000. Oh, about the same.

Yeah. About the same. Okay. All right. Yeah, I, I, I think the labor market has stabilized. It feels like it has stabilized at a. Oh. Yeah.

So stable is. Okay. I think stable is the right word for the labor market. You know, it's soft, but it's stable. It's not getting worse. I don't think maybe the weakness is on the margin. The weakening is on the margin. Because I do think the underlying rate of job growth is probably around 50K. And I think the break even is probably a little higher than that, you know, 50 to 75K. And that goes to the participation rate. You know, that is declining and would be consistent with that. Although I do think your argument that the decline in participation of people that are over 65 may be not related to the job market and it might be related to the equity market. You know, they might feel like their nest stick is big enough. But the decline is so significant. You know, it's just that that argument feels like it's more than that. But anyway. Okay.

Anything else on the employment report before we move on? We want to get to the stats game. There was one other, but let's answer that. Anything else that you want to bring out, call out? Oh, what about hours worked, Dante? What happened to hours worked? Because they've been unusually low as well. The average ticked up slightly.

It was 34.3 and it's kind of been, it was 34.2. It's been at that same rough level. Aggregate hours were up slightly because, you know, the average was up and we added job, so aggregate was up a little bit. But still nothing to write home about, I don't think. Right. One other question on immigration. Have you guys looked recently at labor force growth by native-born versus foreign-born?

Has anyone looked at that recently? I was just looking at the participation rates, actually. Not labor force growth, but the participation rate. And anything knows any differences there? Actually, no. I mean, the participation rate for the foreign-born 16-and-older is down about two-tenths of a percentage point from its peak about a year ago, and that's exactly the same as native-born. So there's really no difference in participation.

No difference. Obviously, the foreign-born labor force is smaller, right? That has fallen. But participation among people that are still in the labor force is still pretty high, not that far off from the peak. Right, right. Okay. Okay.

The other labor market stat that came out this past week, just maybe we can talk about it quickly is productivity growth. Dante, does you look at that? This is not for Q1. 2026, those numbers came out this week. It didn't look closely. I mean, I know the headline was a little bit weaker than it's been. It was, I think, 0.8%.

But I didn't look closely at it because it came out while we were away. Okay. Okay. Chris, have you had a chance to look at that at all? Same here. I saw the top line. I saw that it was a bit weaker, but I didn't delve into it. Okay.

Okay. Yeah, I mean, the Q1 was, Q1 versus Q4 was weak, but year over year, it's still pretty strong, you know, somewhere around 2, 2.5%. So anyway, okay, let's play the, anything else on the job market data before we move on? And we're going to keep this podcast relatively short because it's been, I don't know about you guys, but I'm pretty tired. That's a long trip to go to San Diego and back in a few days. And we were, you know, with clients. And I love the clients, but it, you know, I'm tired.

By the way, what did you think of the, we simulated the podcast, right, at the conference? We had a session at the very end on the last day, simulated podcasts. What did you think of that? Dante, you were in the audience. Chris and I were up on stage with Mike Brisson. How did you think that went, the simulated podcast? I thought it went really well, yeah. It was entertaining.

There was a lot of clients there. It would be a lot of interest in it. It was good. entertaining. Do you see how he led with the word entertaining? Not informative, thoughtful, but entertaining. Who do you squeeze that to? It had good information too, but I think entertaining is a thing you're looking for as well, right? You want to keep people interested. So I think that's important. I'd go with informative first, then thoughtful, then entertaining. You can do all of them, then you really got it. There you go. The audience was pretty engaged, I thought, right? No? Yes. Very much. Very. Very. engaged. I thought it was great. Good way to end up the summit, right, at the end, because it was less formal. It was more fun. It was entertaining. And people were exhausted by that point, right? Because you had two days of nonstop. And did you notice the summit was packed with sessions the whole way through? I mean, my talk on the first day at the end of the day was ended at 6 p.m.

Right? And this was after a long day of sessions. Yeah. Oh, Dante, you. Did you see my plenary session on the first day when I looked at the group? Yeah. How would you describe that, Dante? Was that entertaining? Well, the first word I would use is maybe downbeat. I mean, it was, you were a little more pessimistic than usual, I feel like. Oh, really?

Oh, interesting. Especially at the end. I mean, you got a question on, you have, the fiscal situation and deficits in dead, and I feel like it made it really end on a pretty downbeat note. Not that that's your fault, but that was, yeah. Oh, that's true. Oh, I blame the questioner for that then. Yeah. They took us down. They took us down. Yeah. It was deficits in debt. How can you not be negative on deficits in debt? I mean... I agree. But before that, it was thoughtful. It was informative. There you go. There you go. There was no squeaking.

No squeaking. I was stationary. Yes. Yeah, I was stationary. Okay. Let's play the game. The stats game. We all put forward a stat. The rest of the group tries to figure that out with clues, questions, deductive reasoning. The best stats, one that's not so easy to get our... right away, one that's not so hard, we never get it. And if it's apropos to the topic at hand, the, you know, obviously the labor market all the better, but it doesn't have to be. It can be anything. Marissa, tradition has it that you lead the way here. What's your stat? I have a pair of stats related to one another. Okay. So the first stat is minus 324,000, and then the second related stat is minus 51,000. Hmm. Job-related? Yep.

Payroll survey? Yep. Change in jobs month to month? No. It is a change in jobs, not months to month. Year over year? No. But a change in jobs. Okay. Is it a year-to-date change outside of health care or something like that?

Uh. One is a year to date change, but it's not outside of health care. Outside of health care. Uh, but it's related to aggregate employment, overall employment. No. You know, she's shaking her head, no. Is it industry level? Mm-hmm.

It is. What, is it government related? No. No. What else is down 320? What's that? What did you say, Chris? Year to date.

That's a year to date. Oh, oh. I'm just thinking. One of those numbers is a year to date number. The other one is from its peak. Oh. It's recent peak. And it's industry related.

It's an industry. I'm sorry, the down 51 is year to date. Down 51? Mm-hmm. Information? Yes. Yes. Information.

Heck. Right. Yes. Makes sense. You want to explain? Sure. So information industry, which includes tech, everything tech related. It includes media, publishing, entertainment, movies, all this stuff, right?

This is the industry most highly exposed to AI in terms of adoption rates. It has lost 324,000 jobs since its peak in 2022. And it's lost 51,000 just since the start of the year. So just over the past four months. And when was the peak, did you say? It was late 2022. Okay. Around the time chat GPT was introduced.

Yeah. Right. Okay. So you ascribe it to AI primarily, or is there other stuff going on? I think some of it is AI. I think some of it is just right-sizing an industry that had hired aggressively coming out of the pandemic, namely the tech industry. But certainly if you look at the tech industry and what they say,

they ascribe a lot of it to AI. And I hope this doesn't take somebody else's statistic. But if you look at the Challenger report that came out this week, AI was the number one reason cited for layoffs, and it was the bulk of the layoffs. And it was in this industry, too. So I think there is something to that, that some of it at least is AI.

Right. And are you expecting AI to come on more strongly here in 2020? and be more of a negative to jobs or not, or even potentially a positive to jobs? I guess you could argue it's more positive than negative so far, right? Yeah, I'm not, I'm not a doom and gloom on the AI jobs front. I think that we're seeing job gains due to AI too.

There's plenty of employers that are saying they're hiring people because of AI. So it probably will come on strong, right? I expect adoption rates continue to rise, but I don't think that's necessarily all a negative story for the job market. Right. Chris, you make a point about AI actually net net being a positive source of growth, right? At least so far. That's right. That's right.

Certainly the build out of it is creating a lot of jobs. And then I said during our conference as well, or during the summit as well, that I'm a believer in Jevon's paradox. As the, as AI reduces the cost of goods and services, then you'll actually get more demand, and that will create even more job growth. Is it Jevons or Jevons? Oh, gosh.

I knew it was going to come back. I don't know. Let the audience decide. All right. What did you say, Jevons? That doesn't sound right to me. I say Jevons. See?

That makes much more sense to me, Jevons. I really have no idea. I don't either, but it sounds better. You give a little French, you know. Is that what that was? I thought that was some kind of Italian thing you're doing there with his name. Oh, no.

Yeah. So Jevvon's paradox. Jevons. Jevins. What if you like? Oh, okay. So the idea is with technological change, it increases efficiency,

lowers cost and therefore increases because it's now lower cost, creates other demand for other things. It expands the availability of use and therefore you create, ironically, the efficiency improvement results in more job growth, not less job growth. That's what you're saying. That's right. That's right.

And that's kind of a longer term force that's going to play out. near term, certainly in 2025 into 2026, is the demand side effects of AI have been so large. You know, you mentioned the buildout of data centers and everything that goes to power and everything that goes into data centers. That's why construction jobs are up, right? It's not because of housing, but we're creating a lot of construction jobs. We're creating construction jobs because of data centers and things related, that that and also the wealth effects, the positive wealth effects from the run-up in AI stock prices and its impact

on spending. One reason why retailers are hiring is because high-end, high-net worth households are spending, and they're spending because they're wealthier, that that is generating a lot of jobs. And yes, you have some productivity effects that are maybe negative in Mrs. is calling out the information services sector. That's where you might see it in the most immediate pronounced way. But the net of those two dynamics, the demand side, supply side, means that AI has actually been the source of job growth, you know, on net. That's what you're saying. That's right.

The other factor, and this won't be my stat today, but we've seen a lot of business formations recently. So people are actually starting jobs, and AI appears to be a significant enabler of that, at least according to surveys, according to the industries where we're actually seeing those new businesses form or in business or professional services. So that's another optimistic view here

in terms of the job creation potentially. That's a great point. Yeah, that's a great point. Formations are up. Hey, Dante, I know we put together an AI tracker on economic view where we track a lot of things AI-related. Can we, or maybe we already do, but can we start tracking the positives and negatives in terms of job creation related to AI? You know, I know we have to make some assumptions, but, you know, think about what is getting boosted by AI and what's getting hit by AI and try to create a net concept. here just to see how it's all playing out. Because everything I just said, I think is right, but I don't know for sure. I mean, I haven't done the calculation. Maybe you could ask AI to do it, Dante? I can just start there. Maybe go to Claude and, in fact, that's what Chris is going to do immediately.

He's going to get off and he's going over to Claude. We're all going to get an email with the dashboard. With Bloomberg style kind of colors. And I'm going to complain about that and they'll come back with, you know, something better. Maybe that's Chris's call sign, dashboard. Oh, yeah, dashboard. Oh, I don't mind that. Yeah.

He's in on that one. Yeah. Better than crypto. I said dice and you came up with a better one. Crypto. Crypto. Crypto. I like that.

That's the other thing that was reported at the summit. The first thing was the drones saw Marissa coming down the coast in her outrigger canoe. That was one thing. The next thing is they spotted Chris coming in on a jet from Arbutzo, Italy. You know, and they did a little bit of digging, the reporting, and they found it was crypto-financed. We don't know where the crypto came from, but it was crypto-financed. Is there any truth to that, Chris?

Fake news. Fake news. See, now what's happening with Chris is he's because he's so tired of getting called out on the crypto thing. He's now all in on prediction markets. He's playing those predictions. He's betting on the next ping pong tournament, you know,

that kind of thing. That's why I'm calling them more. That's why I call on dice. I will say I'm following those more. And there was an interesting one on the SEC. I don't know if you want to get into that. Yeah. Well, why don't you mention that and we'll continue on with the game?

But that was one of the questions. We got out to podcast. simulation at the summit we're on the SEC. I thought that was pretty interesting. Yeah, there's this, uh, there's a proposal out, uh, from the SEC to actually move to semi-annual reporting of, uh, financials by a publicly traded companies versus quarterly, right? Right now you get that quarterly, uh, release. Everyone looks forward to it, uh, in terms of the earnings and stock movements, uh, move around. Idea as well, maybe we should, um, extend that to every six months, because there's a lot of short-termism in corporate boardrooms,

if they're constantly having to report out their earnings, maybe moving to this system would reduce some of the administrative burden, so reduce some costs, and then also incentivize them to think longer term. At least that's the argument. What do you think? So I think it's a bad idea. I think we should stick with quarterly.

Everyone's used to it. I agree that there's some cost to it, certainly, but systems are pretty optimized at this point. Companies know what they're doing. There are a lot of technological solutions out there to report out. And I just think it does keep investors and boards and management engage, right? They are having to respond and report out these numbers, explain them, provide guidance. And I'm not entirely convinced that the short-termism is so acute.

I think plenty of boards are thinking. longer term as well as short term. Yeah, I'm with you. That's my intuition. I haven't thought about it deeply, but that's my immediate intuition. As a board member of a publicly trade company, I think it's a good discipline to do it every quarter. And I'm not sure you save any money or resource by doing it every six months. You've got to fire up the machinery and, you know, if it's six months, that might be

more costly to do. Shut it down, rub it back up. It might not be that easy. to do. So I'm with you on that one. Yeah. But the prediction markets are Yeah, that was weird. They're like 70% chance that's going to happen in the next year. Oh, really? Can I ask, can you see what the float is? I mean, you know, how liquid is that bet? Can you see that? Yeah, you can. I think I'm working off memory. I think for this one, it was around a million dollars or 1.2 million. So it's not, okay, not a few people. Yeah. Interesting. So yeah, interesting.

It is curious. Is there insider knowledge who's making these bets? I don't know. Conspiracy theory. Yeah. It'll come out at some point. The rules are due. Yep. Dante, you want to go next?

I can. Okay. Like I've got a pair of negative numbers for you. So I've got negative 475,000 and negative 405,000. Jobs related. It is jobs related. Is it industry? Payroll?

It's not payroll survey. House survey. Household survey. Is it labor force? It's not labor force, no. Is it labor force related? Right. It's labor market related, but not labor force.

Is it employment, household employment? It is related to household employment, yep. So some demographic group within household? It's not that complicated, not that complicated. overall household employment. It's down... Over the year? Really?

It's not over the year. Shorter than that. Really? Past six months? This is the start of the year. It's since January. Yes. If you look from January to April,

and it's the unadjusted measure and then the adjusted measure for household employment. They're both down. So the unadjusted measure is down $475,000 January through April. Even if you adjust it to the payroll concept, it's still down just over $400,000.

thousand from January to April. Wow. Wow. Yeah, much weaker than the payroll survey. That's, that's a big difference, isn't it? Yeah. It is. And I left out, you know, the December to January change obviously is very large, but that's, we know that that's noise from the population control. So if you leave that out and just look from January to April, there's a big decline. And so we, I mean, we've seen this happen before, right, where these gaps open up between the two surveys, but it looks like that's happening again here in early 2026 where the household survey is much weaker. And it goes to your point about labor force as well. You've got that much weakness in employment, but the unemployment rate hasn't moved, right? And that's because we've seen so much weakness in the labor force in terms of participation. So it's been enough to offset what would have likely been a higher unemployment rate here over the last couple of months. So is that $420,000 down January through April or December through April? January through April. If you go back to December, it's much, much bigger because just the decline from December to January, it's,

is almost 900,000 in the unadjusted number. So, yeah, left that out of it. That, you know, that brings up something that's been kind of bothering me, but I've had a hard time articulating. And that is, you know, we all look at the weak job growth. And then immediately a lot of people dismiss it because labor force growth is also weak. So what's the big deal, you know? I mean, unemployment remains stable.

there's not it's not about slack in the labor market. But it also means that the economy's not growing, right? I mean, it's just growing a lot more slowly as a result. I mean, if you don't have, if you don't have, if you don't have workers and labor, it is a, it's a weight on the ability of the economy to grow. So should we take any, people kind of dismiss, you know, the weak, weak job numbers? Should we be dismissing the weak job numbers? I mean, because it means weaker growth, doesn't it? W weaker economic activity, doesn't it? It just means you're relying much more heavily on productivity growth as the only driver of growth, right? And so if, you know, that's been obviously going well over the last year or two, but, you know, if that fades, then you're left with nothing else, right?

I mean, historically, you had those as pretty even drivers of growth, right? Labor force and productivity were both contributing meaningfully to top line growth. And now increasingly, it's one-sided, right? And so what happens when productivity growth inevitably slows at some? some point, then you're left with nothing. Chris, I see you're shaking your head up and down. Yes. Yeah, absolutely. Absolutely.

The demographics are really important here. So I guess what you're saying is it's just another kind of vulnerability in the economy. Yeah, we're growing. All of it, though, is productivity growth. And if that were to falter for whatever reason, then we got a problem. There will be no growth. Right. Yeah.

There's no backup. Yeah. There's no backup. Yeah. Goes to this kind of GDP per person, right? Yeah. It could be that's still okay because you just don't have persons. So it's kind of the way of judging an economy like Japan, right?

Or even other developed, many other developments. economies that aren't have much, they don't much labor force or population growth, but they're okay when you look at it GDP per person or per employee, that kind of thing. So I'm not sure how to think about that. I would prefer to have strong growth in GDP per person and, you know, strong GDP and people. We want all the above, you would think, right? No? Yeah. Don't I think that's definitely better, yeah. Oh, better. Okay. All right. Okay. That's a, that's a, that's a really interesting. So on a payroll definition basis, household employment since the beginning of the year of January through April is down over 400K. That's right. Wow. Okay. Chris, you're

up. What's your stat? All right. I'll give you an easy one. Eight million four hundred and 34,000. Eight million four hundred and forty four thousand. Job number? Four hundred four hundred thirty four thousand. Oh, sorry, 434. Jobs related? Yes. Well, people. People. It is jobs related.

Yes. It's from the... It's not in the job's numbers, though. It's not in the jobs report. It's in today's report. Oh, it's in today's report. It is in today's report, yes. Is it the number of unemployed people?

No. The number of... Underemployed people? Is it an unemployment-related? No. No, it's not. Not unemployment related. Is it related to population of some group?

No? Yeah, that's a number of people. Did you say it's, oh, is it from the household survey? It is, it is. Why does he hesitate on that question? Thinking about it, very carefully. Because that's like really, that's a real head fake. say it again,

8,434,000? Yes. Is it a change in? Is it a change? It's the level. It's a level. Can you give us a hint? Oh, man.

Oh, he said it was easy. We should know that. I thought so. Huh. That's a good hint. Is it a demographic group? Not. I mean, we're going to kick ourselves.

It's not men or women. It's not, uh, okay. It's not the number of self-employed. So you got an idea? What could it be? It's the number of multiple job holders? Ding, ding, ding, ding. You got it.

You got it. Really? Yeah. Why'd you? That's interesting. It's, uh, what's the story there? It's pretty much unchanged from the last month, but it's down 400K, 400,000 from the last year. And I use this as, I keep an eye on this as just an indicator of some stress, right, potentially.

If people are having to take on multiple jobs, right, couldn't indicate additional financial stress on the horizon. We might start to see some additional weakness in the labor market. So the fact that it's pretty flat, not showing a lot of movement actually is a positive sign to me. Huh. Interesting. Did you agree with that with Dante? Do you agree that's a sign of less stress or strength? Well, so I mean, I agree, but I think there's there's another story that you could tell, right? That maybe it's down just because people that want more than one job can't find them, right?

That they lost one of the multiple jobs they had and they can't get a second one back. So, yeah, there's also this question of, you know, maybe there's more demand for multiple jobs and people just can't get them. Hmm. That's true. Is there any, is there any breakout of that in terms of demographic age or anything? Is that older workers where you might be seeing that? Is that related to the decline of participation among older workers? Can you tell?

I didn't see that. Not in the monthly data. I think there's annual data by demographics. There is a breakout of the makeup of those jobs. Again, I'm not sure if this is monthly, Chris, right? But it'll say, like, you have two part-time jobs or a full-time job and a part-time job or two full-time jobs. There is that kind of breakout. Yeah, maybe we should do a little dig more digging there. I'd be really curious. That's interesting. All right, I got a stat and it's a hard stat. So I might have to give you some hints. Two numbers, 18.1 trillion. And let me preface it by saying, I could have this number wrong. I'm just saying, just. I'm just. I.

Like wildly wrong? It could be wrong. You know, I picked this for this because we played the stats game at the simulated podcast at the summit. And I picked, I don't think I used this, the stat, but it's now a day old in my mind. So I'm just saying I could have it wrong. But let's assume I have it right. Okay. 18.1 trillion.

That's the first number. and the second number is 18.1 trillion So the same two numbers that you're telling you. Okay. And I'll give you a hint. It's 18.1 trillion in the most of recent

data that we have, and that's through the month of March, I believe. And it was 18.1 trillion March a year ago. So the point is it has not changed in a year. 18.1 trillion.

Is it trade related? And it's dollars. It's not trade. It's in dollars. It's real after inflation dollars. It's not trade related. Not trade related. It's kind of that because the stat I gave at the summit was 1.69 trillion and 1.67 trillion.

And that's the trade deficit, the real trade deficit in March. of this year compared to last year to make the point that there's been no change. But so this is very similar, same, same kind of dynamic, but it's not with related trade. It's related to consumer-related. Consumer-related household income. 18.1, Troy, I'll push you out of your misery. It's real after-tax income, disposal income, total, 18.1, Troy, right?

So in the past year through March, right, we have data through March. It's not April, right? We have data through, we have data through March. March, yeah. There's been no change in the overall after-tax income adjusted for inflation. No change at all. Real disposable income has zero. No year-over-year growth.

So I don't know. That feels, that doesn't feel good to me. Right. I mean, because going back to the consumer, that's the fodder for spending. I mean, at the end of the day, that's real purchasing power. That's what they've got after tax and after inflation. And, of course, they've gotten the benefit from taxes because of the tax cuts, but of course, inflation's accelerating. And the job market's been weak, not creating a lot of jobs.

So that doesn't auger well for me. By the way, this gets back to something earlier in the conversation. as to why we aren't seeing the impact of the Iran war in the job numbers. And I would proffer it's because of the tax cuts. You know, the peak of the tax benefit to individuals was in March and April. That's when you get the refund checks. And the refund checks this year, because of the deficit finance tax cuts, the one big, beautiful bill act, their refund check this year is about $350 more on average for typical taxpayer than the year before.

And that's going a long way to supporting, that goes back to retail, you know, the retail numbers and retail employment. And I, you know, I don't take much solace in that because the benefit of the tax cuts are now fading very, very quickly under the other side of the tax, under the other side of April 15th. but the effects of the war on gas and groceries and prices is still in full force and it continues to intensify. And so that would argue that the effects of the war have been massed. I think Dante, you were referring to this in the form of counterfactual. I don't know what the counterfactual is, but it's been masked by the tax cutting, and that's going to become much more evident as we go forward. Just something.

And this stat, this $18.1 trillion, no change in real disposable income, is consistent with that perspective. The other thing I'd point out with regard to income, I think I mentioned earlier, the saving rate is 3.6%. That's the lowest it's been, I think it's the lowest has been since, you know, right before the pandemic. Excuse me, right before the GFC, the global financial crisis during the housing boom, you know, part of that is a wealth effect, but part of it may be that high income households where the saving exists or drawing down their savings to supplement their income to maintain their purchasing in the face of the higher prices. which lower middle income households can't do. So I don't know, when I look at the income side of the economy, I get nervous about what's going on just because the low saving rate in the high, the depressed income. What do you guys think of that? Makes sense?

I think that's consistent with an economy that only added 100,000 jobs over the last year, right? So I think that's totally consistent that you wouldn't see a big increase in income. wages are two-thirds of of income. Right, right. Chris, Dante, anything? I guess I would say in the context of everything that's happened over the past year,

with all the shocks to the system, it's actually, you know, if you want a more positive spin, it does speak to some resilience, right? Or it's just AI, you know? Going back to AI driving a lot of growth, do you consider that resilience? or luck?

Or boas? I'll take a little bit of both. But yeah, certainly. Okay. All right. Well, we're going to keep this. I thought it was going to be shorter, but we'll keep it shorter than the hour and ten minutes we typically take. And again, did you notice at the summit, the podcast simulation?

I think we took an hour and ten minutes on the nose. I don't know if you noticed. It's a universal law. We can't help ourselves. Nature. Can't help ourselves. Anything else before we call it a podcast? podcast and go enjoy the weekend. I'm going to go see the Phillies game tonight.

Oh, fun. I'm looking forward to that. Yeah. You're playing the Rockies. We should win. Thanks to everybody that came to the summit, to all our clients and non-clients that came. Yeah, it was great to see everyone. It was great to see you guys. Absolutely. Our colleagues, it was really great to do that. I might mention that we have a Economic Outlook webinar that will be recording soon, and we'll be really soon. So keep an eye out for that. Q&A, right? Q&A.

So no listener to questions today, but listen to that webinar because you'll get a lot of Q&A in that one with some charts, I think. I'm like the podcast. Yes. Yes. Okay. All right. Very good. Anything else?

Hearing none? Okay. Going, going, going on. Well, with that, dear listener, look forward to next week. We are calling this a podcast. Take care now. Bye-bye.