Economy

The swift advancement of artificial intelligence (AI) has sparked significant concern that this new technology will replace jobs and stifle hiring. … Businesses reported a notable increase in AI use over the past year, yet very few firms reported AI-induced layoffs. Indeed, for those already employed, our results indicate AI is more likely to result in retraining than job loss … Looking ahead, however, layoffs and reductions in hiring plans due to AI use are expected to increase, especially for workers with a college degree.

Corporate profits have been elevated since the onset of the COVID-19 pandemic. As of the last quarter of 2024, they were $4 trillion—2.3 percentage points higher as a fraction of national income than they were prior to the pandemic. The increase was entirely driven by domestic nonfinancial industries. Notably, retail and wholesale trade, construction, manufacturing and health care experienced a marked increase in profitability. Higher corporate profits mostly went to rewarding shareholders via higher dividends.

Some economists say these trends may be short term in nature and little cause for concern on their own. Lawrence Katz, a labor economist at Harvard, noted that the uptick in unemployment for college-educated workers was only modestly larger than the increase in unemployment overall, and that unemployment for both groups remained low by historical measures.

I think this is like the quote I know that goes ‘when your neighbor gets laid off, its a recession. When you get laid off its a depression’. Regardless of how ’low’ unemployment is historically, it is also trending up for the first time in a long time, especially for college educated workers who might not have experienced this trend before. Best of luck to everyone out there looking right now.