Latest news with #DeLong
Yahoo
02-08-2025
- Business
- Yahoo
Top economist Brad DeLong to recent college grads: Don't blame AI for job struggles—blame the sputtering economy
As recent college graduates face one of the toughest job markets in years, Berkeley economist and voluble Substacker Brad DeLong has a message for those struggling to land their first full-time gig: Artificial intelligence (AI) and automation are not to blame. Larger forces are at work. DeLong, a professor at UC Berkeley and former Deputy Assistant Secretary of the Treasury, argued in a recent essay that the challenges confronting young job-seekers today are primarily driven by widespread policy uncertainty and a sluggish economy—not by the rapid rise of AI tools like ChatGPT or data-crunching robots. DeLong offered his analysis on July 23, roughly 10 days before the July jobs report stunned markets, revealing that the economy has been much weaker than previously thought for several months. Prominent business leaders had also flagged troubling signs in the economy before the July jobs report dropped. IBM Vice Chair and former Trump advisor Gary Cohn went on CNBC a day before the jobs data, noting 'warning signs below the surface.' Cohn said he pays close attention to the quits rate in the monthly JOLTS data, arguing that 150,000 fewer quits was an ominous sign of poor economic health. DeLong sounded a prophetic note, writing that 'policy uncertainty' over trade, immigration, inflation, and technology has 'paralyzed business planning,' leading to a self-reinforcing cycle of hiring freezes. New entrants to the job market are bearing the brunt of the retreat to risk aversion. In other words, the college graduate class of 2025 is really unlucky. The economist argued that the uncertainty causes companies to delay major decisions—including hiring—in the face of an unpredictable policy environment. 'This risk aversion is particularly damaging for those at the start of their careers, who rely on a steady flow of entry-level openings to get a foot in the door,' he wrote. DeLong has sounded similar warnings of a slowdown for years. He talked to Fortune in 2022 about his theory of the economy starting to sputter from his book Slouching Towards Utopia. In 2025, he wrote, the big story in the jobs market is not actually AI, but something different. Policy paralysis So, what's really keeping freshly minted graduates from clinching that all-important first job? DeLong cited Bloomberg BusinessWeek's Amanda Mull and her theory about 'stochastic uncertainty'—a cocktail of unpredictability around government policies, trade, immigration, and inflation. Companies aren't firing; instead, they're just waiting. And many are delaying new hires in anticipation of possible sudden shifts in tariffs, inflation rates, and regulatory environments. The result is a wait-and-see climate where employers, worried about future economic shocks, have selected caution over expansion. The holding pattern hits new entrants to the workforce especially hard. While overall unemployment in the U.S. remains low, the situation is uniquely difficult for new graduates relative to the rest of the workforce. Citing economists including Paul Krugman, DeLong noted that while the absolute unemployment rate for college graduates isn't alarming, the gap between graduate unemployment and general unemployment rates is at record highs. In the past, higher education reliably led to lower unemployment, but now recent grads are struggling 'by a large margin' compared to previous generations. As previously reported by Fortune Intelligence, Goldman Sachs has argued that the college degree 'safety premium' is mostly gone. The team, led by Goldman's chief economist Jan Hatzius, wrote: 'Recent data suggests that the labor market for recent college graduates has weakened at a time when the broader labor market has appeared healthy.' It also found that since 1997, young workers without a college degree have become much less likely to even look for work, with their participation rate dropping by seven percentage points. Mull cited an analysis by the Federal Reserve Bank of New York which found that tech and design fields, including computer science, computer engineering, and graphic design, are seeing unemployment rates above 7% for new graduates. Why the AI hype misses the mark Although the tech sector is buzzing about AI's potential to replace junior analysts or automate entry-level tasks, DeLong urged caution in assigning blame. In his typical style, he noted, 'there is still [no] hard and not even a semi-convincing soft narrative that 'AI is to blame' for entry-level job scarcity.' Hiring slowdowns, he pointed out, are driven by broader economic forces: uncertainty, risk aversion, and changes in how companies invest. Here again, DeLong's analysis rhymes and aligns with recent research from Goldman's Hatzius. The bank's quarterly 'AI Adoption Tracker,' issued in July, found that the unemployment rate for AI-exposed occupations had reconciled with the wider economy, which contradicts fears of mass displacement. They also noted there have been no recent layoff announcements explicitly citing AI as the cause, underscoring that it's contained to disruption of specific functions, not entire industries. Crucially, he argued, rather than hiring people, companies in the tech sector are splurging on 'the hardware that powers artificial intelligence'—notably Nvidia's high-performance chips—fueling a boom in capital investment while sidelining junior hires. 'For firms, the calculus is straightforward: Investing in AI infrastructure is seen as a ticket to future competitiveness, while hiring junior staff is a cost that can be postponed.' Underpinning these trends is a shift away from any and all risk. Employers prefer to hire for specific short-term needs and are less willing to invest in developing new talent—leaving young applicants caught in a cycle where 'just getting your foot in the door' is more difficult than ever. Incumbent workers, worried about job market uncertainty, are less likely to change jobs, leading to fewer openings and greater stagnation. DeLong's analysis harmonized with Goldman Sachs' findings about the declining premium attached with a college degree: 'For the longer-run, the rise in the college wage premium is over, and a decline has (probably) begun.' For decades, he continued, a college degree was a ticket to higher earnings, and the labor market rewarded those with advanced skills and credentials. In recent years, though, 'this has plateaued and may even be falling.' The causes are complex, he added, but the takeaway: While degrees remain valuable, they are no longer the ever-ascending ticket to prosperity they once were. These comments confirm the gloomy remarks of University of Connecticut professor emeritus Peter Turchin, who recently talked with Fortune about the declining status of the upper middle class in 21st century America. When asked where else he sees this manifesting in modern life, Turchin said, 'It's actually everywhere you look. 'Look at the overproduction of university degrees,' he said, arguing that the decreasing premium that Goldman and DeLong write about shows up in declining rates of college enrollment and high rates of recent graduate unemployment. 'There is overproduction of university degrees and the value of a university degree actually declines.' DeLong's bottom line for recent grads: Blame a risk-averse business climate, not technology, for today's job woes. And now that we know the economy may have been much more risk-averse in 2025 than previously, DeLong's warnings are worth revisiting. DeLong did not respond to a request for comment. For this story, Fortune used generative AI to help with an initial draft. An editor verified the accuracy of the information before publishing. This story was originally featured on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Business Insider
08-06-2025
- Business
- Business Insider
4 moves the Trump administration could make if courts strike down its tariffs
President Donald Trump has four more swings at implementing his tariffs — even if courts strike down his use of the IEEPA. Experts in international trade told Business Insider that Trump could take four different routes to imposing trade barriers without Congress. All four are doable, though significantly more complicated, and are unlikely policies he could change at will overnight. "Now we're over a hundred days into the tariffs, andtariffs are a very top-of-the-agenda item," Drew DeLong, lead in geopolitical dynamics practice at Kearney, a global strategy and management consulting firm, told BI. "There are a number of motivations underneath tariffs, and whether his current tariffs stay, he will find ways to continue to amplify pressure on trading partners," DeLong added. After small businesses sued Trump and his various trade officials over tariffs, the US Court of International Trade ruled unanimously on May 28 that he doesn't have the authority to levy sweeping tariffs using the IEEPA — a 1970s law typically used for economic sanctions during national emergencies. The Court of Appeals for the Federal Circuit resumed the tariffs a day later, but their fate remains uncertain. "That decision, if it is favorable to Trump, would still go to the Supreme Court for review," said Kent Jones, Professor Emeritus of international economics at Babson College. "Many conservative judges, even Trump appointees, have tended to view Trump's use of IEEAP as overstepping the limits of delegating tariff-making power from Congress to the President." Here are four things the Trump administration could do next to keep trade barriers up without Congress. Section 122 DeLong said Section 122 of the Trade Act of 1974, also known as the Balance of Payments Act, could be the White House's first choice if it wants to "continue the pressure immediately" on trading partners. The act's official language allows it to be applied only if there are "large and serious United States balance-of-payments deficits," otherwise known as trade deficits. "Section 122 is probably going to be a top pick," Robert Shapiro, an attorney of international trade at Thompson Coburn LLP, told BI. "That gives Trump some vehicle, but it's a limited 15% for 150 days, and then he has to go to Congress." "That would open the door for Congress to pass a whole bunch of trade actions, but the administration obviously didn't want to go through that first," Shapiro added. Section 232 Section 232 under the Trade Expansion Act of 1962 allows the White House to raise duties on imports it deems a threat to national security. A recent probe into critical mineral imports, for example, argued that the US is overly dependent on foreign sources for materials essential to defense, infrastructure, and innovation. DeLong said that at the moment, there are at least eight ongoing Section 232 investigations, including those involving copper, timber, and semiconductors. He said the recent June 3 tariff hike on steel and aluminum from 25% to 50% is also being done under section 232. Jones said, however, that each section 232 tariff requires a formal investigation, and the sectors it could be applied to are limited. "The problem with section 232 is that it requires a separate action for each industrial category of goods against which tariffs can be imposed," said Jones. "The perceived advantage of the IEEPA was that it allowed broad tariff coverage across the board to all industries." Section 301 Section 301 of the Trade Act of 1974 gives the US Trade Representative — now Jamieson Greer — broad authority to investigate whether other countries are violating existing trade agreements or hurting American businesses. DeLong said that the first Trump administration leaned heavily on the provision to impose tariffs on hundreds of billions of dollars worth of Chinese goods and aircraft from the European Union. But section 301 would require a formal investigation and even a public comment period. "The problem with sec. 301, however, is that it requires a separate determination of specific foreign unfair or discriminatory trade practices, country by country," said Jones. "The IEEPA, again, seemed to give the President more flexibility in declaring an emergency against all global imports into the US without the need to document specific foreign practices," Jones added. Section 338 DeLong said Section 338 of the Tariff Act of 1930 could theoretically allow any US president to impose up to a 50% tariff on countries that discriminate against the US. However, he said this would be a very uncommon approach that could again bring the tariff argument into uncharted territories. "That has not been used — and I don't think I'm understating this —in decades, or ever," said DeLong of section 338. "That would be relatively new."
Business Wire
02-06-2025
- Business
- Business Wire
Nordwand Capital Expands Senior Team with the Addition of Douglas DeLong
RADNOR, Pa.--(BUSINESS WIRE)--Nordwand Capital, a $4 billion multifamily office and registered investment advisor (RIA), today announced that Douglas DeLong, CFA, has joined the firm as Managing Director and Financial Advisor. Mr. DeLong's arrival further expands Nordwand's investment management and estate planning services for high-net-worth clients. Mr. DeLong brings over 20 years of experience advising wealthy families on customized investment and trust strategies. He joins Nordwand from Fiduciary Trust, where he was a Senior Portfolio Manager focused on comprehensive wealth solutions for multigenerational clients. He previously managed $700 million in client assets. "Doug has built a reputation for delivering sophisticated investment and estate planning advice with a high level of personal attention," said Jim Martin, CEO of Nordwand Capital. "He will play an important role as we continue to broaden our capabilities for clients with complex needs," added Ted Brooks, Nordwand's Chief Investment Strategist. Mr. DeLong will be based in Nordwand's headquarters in Radnor, Pa., where he will collaborate with the firm's growing advisory and client service teams. Nordwand is a member of the Dynasty Network, powered by Dynasty Financial Partners' integrated wealth management platform. "We're honored to support Nordwand Capital as they expand their team with exceptional talent like Doug DeLong," said Gordon Ross, Chief Client Officer at Dynasty Financial Partners. "His expertise aligns perfectly with Nordwand's commitment to delivering tailored wealth management services to sophisticated clients." This marks the second meaningful addition to Nordwand Capital's firm in the last several weeks, as the firm announced the addition of another senior financial advisor on May 6, 2025, as part of its continued growth and emphasis on deepening its investment and financial advisory services. About Nordwand Capital Nordwand Capital is a multifamily office and RIA serving wealthy families across the United States. The firm provides customized investment management, tax and estate planning, and philanthropic advisory services. With a deep commitment to its fiduciary responsibility, Nordwand helps families achieve continuity and clarity across generations. For more information about Nordwand Capital, please visit
Yahoo
30-05-2025
- Business
- Yahoo
First of two new agriculture transloading facilities breaks ground in Portsmouth
PORTSMOUTH, Va. (WAVY) — Leaders from The DeLong Company were joined by federal, state and local leaders to break ground Thursday on a $26 million project that'll take grains and feedstuffs from across the country and prepare them for international shipment. The Portsmouth Agricultural Intermodal Export Facility will sit on the former CSX Intermodal Yard at Pinners Point. The Wisconsin-based company is leasing the property from the railroad and using a $750,000 grant from the Commonwealth of Virginia to upgrade the railyard. It'll be the first facility of its type not only for Portsmouth, but also the East Coast. Unlike other transload terminals that receive agriculture products after trains drop off other cargo at rail yards, unit trains carrying exclusively grain will be able to pull in to the Pinners Point facility. Portsmouth to become 'international hub' for shipping of agriculture products, mayor says 'You achieve higher efficiency, better rates, so that's the big difference,' said Brandon Bickham, vice president of exports at The DeLong Company. Bickham said it was in 2023 when DeLong, CSX and the city of Portsmouth Economic Development Department began negotiations to locate in Hampton Roads. However, Bickham said DeLong has been working with the Port of Virginia for several years. 'There's a great local supply of grain, and we really wanted to tie a local supply with the Midwest origination area,' Bickham said. 'And this site, this port, allowed us to do that. We've had a great working relationship with the Port of Virginia.' Part of the development will include a 15,000-metric-ton storage silo and a 'grain leg' that'll rise to roughly 150 feet above ground. When a truck or train comes into the terminal, the soybeans, corn, wheat, DDGs or soybean meal will be transferred into shipping containers bound for Vietnam, Indonesia, Thailand, Taiwan and China. The facility is expected to handle 15,000 to 20,000 containers annually and help cut down on empty containers being placed on ships. Bickham said it's also expected to aid local farmers. Soybeans are the top agricultural export in Virginia, accounting for $1.4 billion in exports in 2023, according to the Virginia Department of Agriculture and Consumer Services. 'It should actually, improve [local farmers'] revenue,' Bickham said. 'So they'll have another grain bid. We should add value to the current price of grain.' Bickham said roughly 15 to 20 new jobs will be created by the export facility. This is the the first of two proposed facilities focusing on agribusiness in the city. Less than a mile away in Port Norfolk, Canadian-based Ray-Mont Logistics plans to do just the same at the Norfolk Portsmouth Beltline Railroad. Portsmouth to become 'international hub' for shipping of agriculture products, mayor says The pair of companies will join Perdue Agribusiness in Chesapeake in the exporting of grain. 'In Hampton Roads, we have a strong farming community in many of our cities,' Mayor Shannon Glover said. 'And so what this facility will enable them to do is to participate in moving their products to different markets. I think that's incredible. And I think it's something that shows collaboration, regionalism with a focus on helping our businesses to grow and prosper.' Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Yahoo
23-05-2025
- Business
- Yahoo
If Trump gets his way, could iPhones made in the US really cost $3,500?
While iPhones have always been costly, experts agree a new tariff environment and pressure from President Donald Trump to make them in the U.S. are likely to drive their prices higher. 'I have long ago informed Tim Cook of Apple that I expect their iPhone's that will be sold in the United States of America will be manufactured and built in the United States, not India, or anyplace else. If that is not the case, a Tariff of at least 25% must be paid by Apple to the U.S.,' Trump wrote in a social media post May 23. Experts disagree, however, on how much of a price increase would result from tariffs and how long it could take before Apple starts manufacturing products in the U.S. More: Trump threatens steep tariffs on European Union goods, targets iPhones; live updates Dan Ives, global head of technology research at financial services firm Wedbush Securities, estimates iPhones could run consumers $2,300 when tariffs are taken into account – a significant increase from Apple's newest model's $1,199 price tag – but a far cry from the $3,500 he estimates it would run consumers if it was made in the U.S. Drew DeLong, who leads the Geopolitical Dynamics Practice at Kearney, a global strategy and management consulting firm, said a price increase of $100 to $200 after tariffs is more realistic. DeLong said, "If I put myself in Apple shoes, I would be less concerned about the reciprocal tariffs, given that they've been told that they're largely exempt from those," and more concerned with the ongoing U.S. investigation into imported semiconductors, a technology largely produced overseas and needed to make iPhones. If Apple shifts production to the U.S., DeLong said it will have the cost and availability of energy and skilled workers to consider. In this scenario, potential tax cuts and deregulation legislation could also affect the company's margins over the next few years, he said. To Ives, the idea of iPhones produced in the U.S. is 'a fairy tale that is not feasible." He said it would realistically take Apple five to 10 years to shift production to the U.S. While Apple has promised to invest $500 billion in the U.S. over the next four years, Ives said the investments are in primarily AI-driven initiatives. "We see no chance that iPhone production starts to happen in the US in the near-term given the upside down cost model and Herculean-like supply chain logistics needed for such an initiative," Ives wrote in a note. DeLong said it won't necessarily take Apple 10 years to bring a site online in the U.S., citing the company's plans to open a server manufacturing facility, which plays a key role in powering Apple Intelligence, in Houston, Texas, in 2026. "I can tell you from anecdotal conversations with folks close to the administration, they want projects built in these four years," DeLong said. During his first administration, Trump claimed Apple's CEO Tim Cook promised to build three plants in the U.S. At the time, the president granted the company tariff exemptions, but the company built zero smartphone factories in the U.S. during his first four years in office, according to multiple media outlets. Apple did not respond to USA TODAY's request for comment. In April, the Trump administration issued reciprocal tariff exemptions for smartphones through a presidential memo clarifying an executive order and updated guidance from U.S. Customs and Border Protection. Apple had already made plans to shift some production of U.S.-bound iPhones from China to India to mitigate tariff effects. On a recent earnings call, Apple CEO Tim Cook said the company aims to have the majority of iPhones sold in the U.S. imported from India before the end of this year. Nikolas Guggenberger, a law professor at the University of Houston, said Trump's comments on Truth Social May 23 serve as an announcement of his intention to do something, but not formal policy. 'It's just like the president could be giving a speech and announcing a new policy or intent to implement a policy,' Guggenberger said. 'He still needs to rely on formal channels.' Perhaps the most straightforward way for Trump to make Apple pay more tariffs for their iPhones, he said, would be for the administration to drop the reciprocal tariff exemptions for smartphones all together. But if Trump wanted to specifically target Apple, Guggenberger said the president could put tariffs only on smartphones coming from India, where Apple plans to manufacture most of its U.S.-bound product. Both strategies would also affect other phone manufacturers. Reach Rachel Barber at rbarber@ and follow her on X @rachelbarber_ Contributing: Reuters This article originally appeared on USA TODAY: Could iPhones really cost $3,500 if Trump gets his way? Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
