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CNBC
21 hours ago
- Business
- CNBC
‘White collar' jobs are down — but don't blame AI yet, economists say
While there hasn't been much hiring for so-called "white collar" jobs, the contraction is not because of artificial intelligence, economists say. At least, not yet. Professional and business services, the industry that represents white-collar roles and middle and upper-class, educated workers, hasn't experienced much hiring activity over the past two years. In May, job growth in professional and business services declined to -0.4%, slightly down from -0.2% in April, according to the Bureau of Labor Statistics. In other words, the sector has been losing job opportunities, according to Cory Stahle, an economist at job search site Indeed. Meanwhile, industries like health care, construction and manufacturing have seen more job creation. In May, nearly half of the job growth came from health care, which added 62,000 jobs, the bureau found. More from Personal Finance:Here's what's happening with unemployed Americans — in five chartsThe pros and cons of a $1,000 baby bonus in 'Trump Accounts'Social Security cost-of-living adjustment may be 2.5% in 2026 However, economists have said that the decline in white-collar job openings is more driven by structural issues in the economy rather than artificial intelligence technology taking people's jobs. "We know for a fact that it's not AI," said Alí Bustamante, an economist and director at the Roosevelt Institute, a liberal think tank. Indeed's Stahle agreed: "This is more of an economic story and less of an AI disruption story, at least so far." There are a few reasons AI is not behind the declining job creation in white-collar sectors, according to economists. For one, the decline in job creation has been happening for years, Bustamante said. In that timeframe, AI technology "was pretty awful," he said. What's more, the technology is even now still in early stages, to the point where the software cannot execute key skills without human intervention, said Stahle. A 2024 report by Indeed researchers found that of the more than 2,800 unique work skills identified, none are "very likely" to be replaced by generative artificial intelligence. GenAI creates content like text or images based on existing data. Across five scenarios — "very unlikely," "unlikely," "possible," "likely" and "very likely" — about 68.7% of skills were either "very unlikely" or "unlikely" to be replaced by GenAI technology, the site found. "We might get to a point where they do, but right now, that's not necessarily looking like it's a big factor," Stahle said. While AI has yet to replace human workers, there may come a time where the technology does disrupt the labor force. "Certainly, jobs are going to transform," Stahle said. "I'm not going to downplay the potential impacts of AI." Stahle said that openings for consulting jobs focused on implementing generative AI have been rising. Over the past year, management consulting roles with AI language accounted for 12.4% of GenAI postings, showing signs of growing demand, per a February report by Indeed. A separate report by the World Economic Forum in January forecasts that by 2030, the new technology will create 170 million new jobs, or 14% of the current total employment. However, that growth could be offset by the decline in existing roles. The report cites that about 92 million jobs, or 8% of the current total employment, could be displaced by AI technology. For knowledge-based workers whose skills may overlap with AI, consider investing in developing skills on how to use AI technology to stay ahead, Stahle said.
CNBC
3 days ago
- Business
- CNBC
Here's what's happening with unemployed Americans — in five charts
While the unemployment rate in the U.S. is still fairly low, data shows it's not uncommon to see individuals job hunting for extended periods of time. The unemployment rate remained flat at 4.2% in May, the Bureau of Labor Statistics reported Friday. However, over the past six months, it's become "drastically harder to find a job," whether you're entering the job market for the first time or you've been looking for a while, according to Alí Bustamante, an economist and director at the Roosevelt Institute, a liberal think tank. "It's not that folks are losing their jobs," Bustamante said. "It's just that businesses are much more reticent to hire people, to make investments, because they just feel this very uncertain economic climate." More from Personal Finance:Millions of Americans would lose health insurance under House GOP megabillCheck your home insurance ahead of an 'above normal' hurricane season401(k) balances drop due to market volatility: Fidelity Bustamante and other economists say several data points beyond the headline job market numbers — the job-finding and quits rates, the share of workers who have been unemployed for 27 weeks or more, a broader rate of unemployment and the state of so-called "white collar" jobs — showcase deeper issues within the labor market. "Employers aren't hiring, they're not firing. People aren't leaving their jobs, and there's just fewer opportunities right now," said Cory Stahle, an economist at Indeed, a job search site. As career coach Mandi Woodruff-Santos put it during a recent interview with CNBC: "The job market is kind of trash right now." Here's what's happening with unemployed Americans, in five charts. The job-finding rate reflects the share of unemployed workers who successfully found a job, Stahle said. Over the past few years, the job-finding rate for unemployment has been declining, he said. In other words, people who are looking for work are not finding jobs, Stahle said. On the flip side, the quits rate reflects the share of employees who have left their jobs in a given month, Stahle said. That figure has also been declining, meaning people are not voluntarily leaving their jobs. The quits rate was at 2.0% in April, little changed from 2.1% in March, both numbers seasonally adjusted, according to the latest Job Openings and Labor Turnover report by the Bureau of Labor Statistics. The number of quits was down by 220,000 over the year. Hiring activity has also been down in recent years. The rate of hires was at 3.5% in April, little changed from 3.4% in March, both seasonally adjusted, per the JOLTs report. As people stay put in their jobs and employers are reluctant to hire, such factors create a "low hiring, low firing" environment, Stahle said. The number of long-term unemployed workers dropped in the bureau's latest report. However, not only is the rate still high, the recent drop could also be a red flag, Bustamente said. The share of unemployed workers facing long-term unemployment — those who have been jobless for at least 27 weeks — was a seasonally adjusted 20.4% in May, according to the bureau's latest data. That's down from a seasonally adjusted 23.5% in April. But the recent decline may not be an improvement. It could be signaling that a large number of long-term unemployed workers left the labor force altogether, he said. Considering that 139,000 jobs were added in May and about 218,000 workers are no longer in the unemployment cohort, there's a significant gap of workers who were unemployed but did not secure new roles, Bustamante said. What's more, the number of people not in the labor force jumped by 622,000 in May. "All the data point to long-term unemployment declining because people left the labor force," Bustamante said. While the headline unemployment rate — also known as the U-3 rate — has remained steady, another measure shows a clearer picture of what's happening with unemployed workers still looking for jobs, experts say. The U-6 rate includes the total number of unemployed workers, plus all marginally attached workers, and the total employed part time for economic reasons. Marginally attached workers are those who are neither working nor looking for a job — but indicate that they want and are available for work, and looked for a new role recently. There's a subset of this group called discouraged workers, or those who are not currently looking for a job due to labor-market reasons. People employed part time for economic reasons are those who want and are available for full-time work but settled for a part-time schedule. As of the latest BLS data, the U-6 rate remained unchanged from April at 7.8%. This data tells us that more and more Americans have either stopped looking for work out of labor-market frustrations, or are picking up part-time gigs to get by financially, experts say. When looking at professional and business services — the industry that represents "white collar," and middle and upper-class, educated workers — there hasn't been much hiring, experts say. Fields such as marketing, software development, data analytics and data science have far fewer opportunities now than they did before the pandemic, Stahle said. On the other hand, industries such as health care, construction and manufacturing have seen consistent job growth. Nearly half of the job growth came from health care, which added 62,000 jobs in May, the bureau found. "There's been a divergence in opportunity," Stahle said. "Your experience with the labor market is going to depend largely on the type of work it is you're doing."
Boston Globe
20-05-2025
- Business
- Boston Globe
Trump scolded companies for raising prices. Do they have a choice?
'Fundamentally, what we're seeing in both instances is that the president makes a policy mistake, that policy mistake leads to an increase in consumer prices and the president who made the policy mistake is blaming the businesses,' said Michael Strain, an economist at the right-leaning American Enterprise Institute. Advertisement In the case of Trump's tariffs, which are set at 30 percent on Chinese imports until mid-August, the effects will reverberate across the economy, either pushing up prices for consumers or, if companies do absorb some of the costs, lowering profits for businesses. Those responses could drive inflation, slow growth and raise unemployment. Get Starting Point A guide through the most important stories of the morning, delivered Monday through Friday. Enter Email Sign Up Yet while mainstream economists are generally in agreement that there is nothing unseemly about raising prices when companies' costs spike, that view is hardly universal outside the profession. A variety of populist-minded thinkers across the political spectrum think that there may be grounds for concern about price gouging, and that Trump wasn't necessarily wrong to call out companies for raising prices. 'I'm not here to tell you whether he's right about certain industries,' said Elizabeth Wilkins, the president of the Roosevelt Institute, a liberal think tank. 'But the basic idea that companies have more pricing power than we believe that they did is something we should interrogate.' Advertisement Trump suggested that Walmart use its billions in profits from last year -- 'far more than expected,' he wrote on his platform Truth Social on Saturday -- to cushion consumers against price increases. But the size of a company's profits has little effect on its decision to raise prices, said Chad Syverson, an economist at the University of Chicago. Most companies want to preserve their profits whether they are large or small, because failing to do so would incur the wrath of their owners or shareholders, some of whom are pension funds and small-time investors. They pass along price increases to consumers instead. Pricing decisions come down to factors other than profitability, like how much competition companies face and how sensitive consumers are to price increases. If you splurge on a latte only now and then, you may balk when the coffee shop raises prices. If you can't live without your daily caffeine and sugar hit, you may suck it up and pay the higher amount. And if, in some cases, companies increase prices by even more than the jump in their costs, that doesn't necessarily reflect nefarious behavior, said Alexander MacKay, an economist at the University of Virginia. It may reflect the fact that consumers are no longer as turned off by price increases. This appeared to happen during the pandemic, when some companies raised prices by a small initial amount in response to higher costs. Companies that saw little drop in demand often continued to raise their prices. Advertisement Jared Bernstein, who served as Biden's top White House economist, said many consumers during the pandemic were less deterred than usual by price increases because they were flush from a series of government cash infusions. But, Bernstein added, those idiosyncratic circumstances have largely disappeared, so firms are likely to be more restrained in raising prices in response to Trump's tariffs as a way to bolster profits. He said he still expected them to pass along cost increases, however. Populist critics of mainstream economics see companies' pricing decisions much more cynically. Oren Cass, a former Republican policy aide, said in an email that a large company like Walmart had far more influence over its prices than it let on. 'If Walmart were to simply adopt a policy that 'we will not change our prices in response to the tariffs,' there would be some situations where suppliers ate the costs, some where suppliers shifted to other sources of supply to avoid the tariffs, and some where Walmart accepted lower margins,' said Cass, whose think tank, American Compass, pushes Republicans to adopt more worker-friendly policies. Walmart argues that its options are still limited. In an interview with CNBC last week, Walmart's chief financial officer, John David Rainey, said that the company is 'well equipped' to navigate price increases of 2 percent or 3 percent but not a tariff of 30 percent, the current rate on goods from China. Rainey added that Walmart would in fact absorb some of the cost increases. Nick Iacovella, executive vice president of the Coalition for a Prosperous America, which has advised the Biden and Trump administrations on efforts to expand domestic manufacturing, noted a dubious logic to price-setting by companies: An automaker will scream about the need to raise prices when costs increase, but when an automaker takes advantage of a trade deal to shift production to Mexico, it rarely passes the savings along to consumers. Advertisement 'Can you tell me what car they lowered the price for when they saved all that money?' said Iacovella, a former Senate aide to Secretary of State Marco Rubio. 'The answer is none.' On the left, Wilkins of the Roosevelt Institute argued that large companies do not merely raise prices when their costs increase, or when shoppers become willing to pay more. She said companies sometimes exploit widespread concerns about inflation to actively manipulate prices. In a competitive industry, she said, a company should be reluctant to announce a price increase, for fear that other companies would undercut it. But in a market with only a few actors, a large company might signal its intention to raise prices on an earnings call as a way to encourage other large companies to follow suit. 'It's not explicit collusion, but you can kind of throw those one-sided invitations out there,' said Wilkins, a former chief of staff to Lina Khan, Biden's head of the Federal Trade Commission, who considered looking into these practices. MacKay, the University of Virginia economist, conceded that this sort of coordination was possible. He pointed to a recent study arguing that airline industry executives have effectively coordinated to reduce seats on competitive routes by telegraphing their intentions during earnings calls. But MacKay wasn't entirely convinced. 'Executives need to make disclosures about what they're doing as a public company,' he said. 'Often when firms face common industrywide trends, they're making similar decisions. So it's hard to say conclusively.' Advertisement This article originally appeared in .
CBS News
29-04-2025
- Politics
- CBS News
Trump sets executive order record in his first 100 days
President Trump has set a historic record during the first 100 days of his second term, signing far more executive orders than any other president in U.S. history over the same period. Mr. Trump has signed 142 executive orders so far, according to data from the American Presidency Project at the University of California, Santa Barbara. The previous record was held by President Franklin D. Roosevelt, who issued 99 executive orders during his first 100 days in 1933, primarily to combat the Great Depression, according to the Roosevelt Institute. According to the American Presidency Project's data, President Joe Biden did not reach 142 executive orders until September 2024, while President Barack Obama and President George W. Bush required nearly their entire first terms to hit that milestone. Obama reached 142 executive orders in December 2012, and Bush in May 2004. Mr. Trump's use of executive authority over the past 100 days also surpasses the number of executive orders signed by Obama and Bush during their entire second terms. Obama hit 129 executive orders, and Bush 118. Mr. Trump's 142 executive orders in just 100 days has eclipsed the lifetime totals of 15 early American presidents combined — including George Washington (8), Thomas Jefferson (4) and John Adams (1). Mr. Trump has defended his heavy reliance on executive actions as necessary to deliver on campaign promises and to move quickly amid ongoing gridlock in Congress. "With these actions, we will begin the complete restoration of America and the revolution of common sense," the president stated during his inauguration address about his incoming barrage of executive actions. Many of the executive orders over the last 100 days have triggered controversy and furious counteraction from Democratic groups, federal workers' unions and immigration advocacy groups. Several high-profile directives — including hardline restrictions on immigration, a rollback of key environmental protections and expanded tariffs on foreign goods — have drawn sharp criticism from civil rights groups, environmental advocates and some business leaders. Legal challenges against many of the orders are already underway in federal courts — and growing. Senior White House officials tell CBS that the record-setting spree highlights Trump's preference for unilateral action as a means of driving policy targets, especially in a polarized Washington where major legislation often faces steep hurdles. "We're signing executive orders at a pace that no one can keep up with. Expect the same pace in the next 100 days — trade deals, peace deals, and tax cuts," a senior White House official said. "The American public doesn't have the luxury of waiting." Hogan Gidley, a former senior White House official during Mr. Trump's first term, said the president's executive actions "demonstrate decisive leadership" and a commitment to "fulfilling campaign promises," particularly on key issues like border security, deregulation and energy production. "It is what the American people demanded, deserved and Donald Trump delivered," Gidley said, referring to his November victory. However, since his 2024 win over Kamala Harris, Mr. Trump has faced louder backlash from Democrats, who counter that the administration's approach sidelines legislative oversight and relies heavily on expanding executive power. "Nothing that he's doing is the reason why he got elected. He got elected to lower prices when he's been obsessed with gaining more power at the executive branch and crashing our economy," said Chuck Rocha, a CBS News political contributor and former senior adviser to Sen. Bernie Sanders, a Vermont independent. "People just wanted cheaper gas and groceries." According to a new CBS News poll, 64% of Americans think Mr. Trump is trying to increase presidential power — including 84% of Democrats. A majority think he should get his policies enacted by working with Congress to pass legislation rather than through executive orders. According to the poll, 76% of those surveyed said Mr. Trump should work with Congress to pass laws while 24% said he should use executive orders to change regulations.
Boston Globe
10-04-2025
- Business
- Boston Globe
Tariffs are dumb . . . right?
It's enough to make you wonder: How long can this tariff thing last? On Wednesday, Trump pulled back on some of his most punitive levies. And it's not hard to imagine the next president — Democrat or Republican — making a hard pivot to free trade. But don't count on it. One of the most important developments in American politics over the last decade — easy to forget amid all the outrage over Trump's trade war — is the bipartisan turn to protectionism. Advertisement The last president, Democrat Joe Biden, Get The Gavel A weekly SCOTUS explainer newsletter by columnist Kimberly Atkins Stohr. Enter Email Sign Up It's a desire that animates much of Washington. And it would be a mistake to discount its staying power. When Trump leaves office, there will still be deep concern about a hollowed-out Rust Belt; when the next administration takes office, Washington will still be fretting about American reliance on Taiwanese semiconductors. Tariffs may look ill-advised today. But they could very well be with us tomorrow. The question is: Can they be deployed intelligently — or are they always a bad idea? Advertisement Employees on an electric car production line near Ningbo, China, in 2021. The Biden administration put stiff tariffs on Chinese EVs and several other products. LORENZ HUBER/NYT The liberal case for tariffs I meet up with Todd Tucker at a cafe in downtown Boston. His day job is at the left-leaning Roosevelt Institute think tank in Washington. But he's in town for a fellowship at Harvard University's 'Reimagining the Economy' project. And after we order our drinks — cappuccino for him, cup of tea for me — we dive into one of his favorite subjects: what an activist government can do to boost manufacturing. It's called 'industrial policy.' And historically, Tucker explains, it's been seen as a tool for developing nations. 'You're some smaller country,' he says, and 'the UK, the US have these huge economies of scale. They're the powerhouses — whether it's autos, steel, whatever. And you want to find a niche in that system." So you do two things. First, you levy tariffs on imports from the Americans and the Brits in a bid to carve out a domestic market for your own burgeoning automakers and steel mills. Then you subsidize these up-and-coming firms in the hope of turning them into genuine competitors on the world stage. To American policymakers, this sort of meddling in the free market long felt unfair — artificial support, they said, for foreign competitors aiming to grab some of our global market share. But in recent years, they've started to see a place for industrial policy right here in the United States. On the center-left, leading thinkers and politicians have taken a mounting interest in the green economy — seeing it as both an answer to climate change and a path to prosperity. And when it comes to building green technologies, Tucker says, America is something like a developing country. Advertisement In some cases — think solar panels and electric vehicles — we're struggling to catch up with the Chinese. And in others, we're trying to invent entirely new tech. On the right, there isn't as much interest in the green economy; in some quarters, there is outright hostility. But conservatives have an interest in reviving manufacturing more broadly. Indeed, Trump has put it at the center of his political identity. After he took office the first time in 2017, he took a step toward industrial policy — slapping levies on Chinese steel and aluminum and promising a wave of new factory jobs in the heartland. That didn't work out very well. Manufacturing employment When Biden took office in 2021, he put a more robust industrial policy in place. After pushing some big bills through Congress — including the Inflation Reduction Act and the CHIPS Act — he poured billions of dollars into clean energy and semiconductor production. Tariffs were part of his strategy. But they were more of 'a backstop,' Tucker argues — a way to protect the federal government's sweeping new investments in chip foundries and electric vehicle plants from Chinese competition. Tucker, who served on Biden's transition team, considers the former president's industrial policy a success — there was a But while he expects the jobs in those factories to be good, he's under no illusion that they will be plentiful. Advertisement Robotics have transformed industry. Automated it. 'You're actually failing as a manufacturer,' he says, 'if year after year, you don't need fewer workers than you needed the year before.' But even if industrial policy won't mean big job growth, Tucker says, there is a vital argument for opening new factories: national security. The national security argument The argument goes something like this: The pandemic demonstrated how fragile global supply chains can be. And with climate change upon us, large-scale disruptions will only be more frequent. Building up some industrial muscle is an important hedge against instability. Another reason to reindustrialize: Big machines on factory floors will be required to harness new forms of clean power — fusion and green hydrogen. And more immediately, there's the matter of securing access to critical inputs like semiconductors, which power everything from televisions to cars to high-tech weaponry. Right now, Taiwan produces more than 90 percent of the world's most advanced chips. And a Chinese invasion of that island would put the United States in a deeply vulnerable position. But here's where the industrial policy skeptics come in. Michael Strain, an economist with the right-leaning American Enterprise Institute, agrees that semiconductor access is a bona fide national security concern. 'But it's a long leap from that concern,' he says, 'to the judgment that semiconductor production should be relocated' to the United States. Subsidizing factories is expensive. And there's no guarantee of success. Indeed, the Biden administration's big bet on the once mighty but now struggling Intel to turn America into a chipmaking powerhouse Advertisement Strain argues there are cheaper ways of ensuring a domestic supply of chips, rare earth minerals, and other critical inputs. In some cases, we could stockpile. And in others, Washington could work with allies to diversify supply chains. But we seem obsessed with reindustrialization, he says. And that's a problem. President Trump held up a chart of what he called "reciprocal tariffs" in the Rose Garden at the White House on April 2. Chip Somodevilla/Getty Smokestack dreams When Trump declared his trade war in the Rose Garden last week, he promised a 'golden age' of American prosperity. 'Jobs and factories,' he said, 'will come roaring back into our country.' This is how protectionism is sold. Not on the finer points of semiconductor production but on the promise of reclaiming past glories: The out-of-work will get high-quality jobs on the assembly line; hollowed-out factory towns will buzz again; the awful appeal of opioids will dim. For critics, this is the tariff argument at its most misguided. Fewer than 1 in 10 American workers toil in factories today. And there is little reason to believe we can return to anything like the 1940s and the 1950s, when Trump blames free trade deals like NAFTA for the steep drop in factory employment. And they surely played a role. But they were just one of several factors that contributed to the decline in factory work. Others included automation, a growing concentration of market power in the hands of fewer firms, and shifts in tax policy and regulation. That's a lot to overcome, tariff skeptics say. Levies won't get us there. And besides, they say, we've transitioned. We live in a service economy now: baristas and medical assistants and IT workers. Better to pursue policies like universal child care and free community college that will help broad swaths of these workers than to chase smokestack dreams. Advertisement 'Resetting the whole paradigm' Who will argue, then, for the Trump tariffs? Recently, I spoke with Mark DiPlacido, who worked in the office of US trade representative Robert Lighthizer in the first Trump administration, and is now with American Compass, a leading think tank on the populist right. And he was pleased with what he's seeing. 'The president,' DiPlacido said, 'is really resetting the whole paradigm of US trade.' He pointed out that America has a trade deficit of Many economists will tell you that's not a problem. Our heavy spending on Chinese electronics, South Korean cars, and Italian wine is a demonstration of our wealth, they'll say. And the fact that our trading partners take so many of our dollars and invest them right back in America — buying our stocks and real estate and even building the occasional factory here — is a show of confidence in our economy. Related : But DiPlacido says that too much of that 'investment' is just a snatching up of American wealth — and that not enough of the money that flows back into the country is filtering down to working people. The only way to confront this problem is to build more stuff, he says. And even if factories don't employ the same number of people they once did, they can still be important anchors for local economies, DiPlacido adds. Wouldn't you rather have a factory with relatively few employees in your town than no factory at all? And wouldn't you like to keep the industrial process close so we can learn from it? So we can innovate? So we can develop new products? The answer to these questions is surely yes. But at what cost? If tariffs drive up the price of cars and toaster ovens, as expected — if they curb consumption and push people out of work — that will mean real pain. And it will be felt most acutely by the working people President Trump says he wants to help. The future of tariffs It's certainly possible that a bad experience with tariffs over these next couple of years will usher in an era of free trade. That's happened before. After the infamous Smoot-Hawley tariffs of 1929 deepened the Great Depression, America rejected protectionism and helped lead a global effort to lower trade barriers. The payoff was clear. In the decades that followed, America got richer. And while the country's manufacturing sector started to slip, it was still quite strong. Prosperity was widely shared. But things have changed. Inequality has grown. Too many old factory towns are in ruins. And fair or not, everyone seems to blame NAFTA. Even if Trump's tariffs fail, then, it will be difficult for policymakers to embrace a full-throated free trade agenda — to argue, in effect, that we're better off keeping most manufacturing in China and Vietnam and Mexico. Plenty of voters will still see free trade as a root cause of our economic anxieties. And they'll demand that those anxieties be addressed. Congress could respond with a sweeping new package of social welfare programs. But that seems unlikely as long as the Republican Party has any sway in the House and the Senate. No, the strategy most likely to prevail is the one with the broadest appeal. And that's industrial policy. During the Biden administration, 17 Senate Republicans joined their Democratic colleagues to approve the CHIPS Act and 19 backed the $1 trillion Bipartisan Infrastructure Law. The politics here are pretty straightforward. Voting for new factories — and new roads and bridges to carry the products to market — is popular. And here's the thing: Congress doesn't even have to pass any big new industrial policy legislation in the coming years. It just has to resist Trump's entreaties to gut Biden's legacy. It just has to keep the existing industrial policy in place. Then it can count on the next president to impose Biden-style targeted tariffs to protect those investments. Or it can put those targeted tariffs in place itself. As long as the levies don't wreak havoc on the global economy — and they shouldn't — the public probably won't even notice. David Scharfenberg can be reached at
