Why economists need to ‘reset’ jobs reports expectations

00:00 Speaker A

With massive investments like you just mentioned in AI and data centers in this country, it’s clear that companies are still investing a lot in their businesses, even outside of AI. Why isn’t the US economy growing faster than 2.7%?

00:13 Speaker B

The global outlook for real GDP is 2.7. Our new forecast for the USA is 3.4%. So that’s significant growth overall for the year. and again, a lot of that front was burdened by taxes. but also a tremendous amount of business investment. and we see this happening globally in the United States as well. and you’re almost getting to the point where consumption is absolutely the key driver of the economy in terms of where growth comes from, business investment as businesses continue to try to stay ahead of the curve using AI and AI tools.

00:53 Speaker A

Will this be a jobless recovery?

00:58 Speaker B

There will be a slow recovery, but this is actually the demographic changes we are talking about. Once again, I encountered 11,400 people turning 65 every day between now and the end of this decade. That’s a lot of people. Not all of them retire at 65, but many do. I think immigration decreased last year, the final numbers haven’t been released yet but maybe two, 300,000 people came to the country. And we don’t have children. We’ve talked about this before. So between those three things, a print run of 50,000 is probably to be expected. So our breaking point is currently around 40 to 50,000. Anything above 50,000 would cause the unemployment rate to drop even further. So what we’re going to see is that we really need to reset the way we think about jobs because 150, 200, 250,000 jobs every month has been normal for the last forty years. The average for the foreseeable future will be 30, 40, 50,000. It will be a much slower pace. and of course we will see some periods where the number is actually negative.