Latest news with #labormarket
Yahoo
a day ago
- Business
- Yahoo
Jobs data: Why this expert expects a weakening labor market
The labor market is in focus as investors are set to get fresh jobs data throughout the week. The Burning Glass Institute director of economic research, Guy Berger, joins Market Domination Overtime to discuss how several policies coming out of the Trump administration are putting pressure on the labor market, including immigration changes and tariffs. To watch more expert insights and analysis on the latest market action, check out more Market Domination Overtime here.
Yahoo
4 days ago
- Business
- Yahoo
Is AI taking new grads' jobs? Not so fast.
College graduates are facing an especially tough labor market right now, haunted by tech layoffs, some companies' reluctance to hire in an era of economic uncertainty, and a dispiriting job search process, among other causes. But their employment prospects aren't broadly being hampered by AI taking their jobs — yet. That's according to an analysis from Will Raderman, an employment policy analyst at the Niskanen Center, a think tank. 'There are more standard explanations than the flashy AI explanation at this point,' Raderman, who wrote the analysis for Employ America, another think tank, told Yahoo Finance. It's true that recent college graduates between the ages of 22 and 27 currently have a higher unemployment rate than the overall working population, as the New York Federal Reserve has noted. And it's true that the labor market for these workers "deteriorated noticeably" in the first quarter of this year: New grads had an unemployment rate of 5.8% in March, compared to a rate of 4.6% in March 2024. But new graduates also had an employment rate around or above the rate for all workers just before the pandemic struck. While that gap has since grown worse, the trend predates the adoption of AI in the workplace, which nonetheless remains uneven across many sectors. Drilling down further, Raderman examined the outcomes of workers in certain majors and sectors. In his analysis, he noted that 'if AI is to blame for the woes of recent college graduates, then we should expect to see college majors with the highest exposure to AI' — like computer science and other STEM fields — 'experiencing greater increases in unemployment.' Instead, the reality is more complicated. For one thing, the number of students getting a bachelor's degree in computer and information sciences more than doubled between the 2013-2014 academic year and the 2022-2023 academic year, though the US employed fewer software engineers in January 2024 than it did in 2018. Simply put, at any given moment, there can be more tech grads than tech jobs, a common reality in that volatile sector where investment can come in large waves but quickly evaporate. What's more, some of the STEM majors who are struggling to find work today, including those in computer science, were also struggling with higher unemployment rates before generative AI took off. Meanwhile, other AI-exposed majors like mathematics, accounting, and business analytics are currently doing better unemployment-wise than they were pre-pandemic, Raderman wrote. 'Although computer science majors are in rough shape, many STEM and business majors have seen lower unemployment than pre-pandemic,' Raderman wrote in his analysis. Raderman is not the first to note that AI is unlikely to be a driving factor in recent college graduates' unemployment rates. Jaison Abel, an economist at the New York Federal Reserve, told NPR this month that while this job market for new grads is 'among the most challenging in the last decade, apart from the pandemic,' AI was likely not the main culprit, 'in large part because the adoption of AI so far has been fairly limited.' That's not to say AI won't be a bigger factor in unemployment in the future or that it isn't weighing on some workers' prospects now. Even President Trump's AI 'action plan' released this week noted that AI will "transform how work gets done across all industries and occupations, demanding a serious workforce response to help workers navigate that transition." The administration recommended the Department of Labor 'leverage available discretionary funding, where appropriate, to fund rapid retraining for individuals impacted by AI-related job displacement.'Emma Ockerman is a reporter covering the economy and labor for Yahoo Finance. You can reach her at Sign up for the Mind Your Money newsletter Sign in to access your portfolio
Yahoo
4 days ago
- Business
- Yahoo
Is AI taking new grads' jobs? Not so fast.
College graduates are facing an especially tough labor market right now, haunted by tech layoffs, some companies' reluctance to hire in an era of economic uncertainty, and a dispiriting job search process, among other causes. But their employment prospects aren't broadly being hampered by AI taking their jobs — yet. That's according to an analysis from Will Raderman, an employment policy analyst at the Niskanen Center, a think tank. 'There are more standard explanations than the flashy AI explanation at this point,' Raderman, who wrote the analysis for Employ America, another think tank, told Yahoo Finance. It's true that recent college graduates between the ages of 22 and 27 currently have a higher unemployment rate than the overall working population, as the New York Federal Reserve has noted. And it's true that the labor market for these workers "deteriorated noticeably" in the first quarter of this year: New grads had an unemployment rate of 5.8% in March, compared to a rate of 4.6% in March 2024. But new graduates also had an employment rate around or above the rate for all workers just before the pandemic struck. While that gap has since grown worse, the trend predates the adoption of AI in the workplace, which nonetheless remains uneven across many sectors. Drilling down further, Raderman examined the outcomes of workers in certain majors and sectors. In his analysis, he noted that 'if AI is to blame for the woes of recent college graduates, then we should expect to see college majors with the highest exposure to AI' — like computer science and other STEM fields — 'experiencing greater increases in unemployment.' Instead, the reality is more complicated. For one thing, the number of students getting a bachelor's degree in computer and information sciences more than doubled between the 2013-2014 academic year and the 2022-2023 academic year, though the US employed fewer software engineers in January 2024 than it did in 2018. Simply put, at any given moment, there can be more tech grads than tech jobs, a common reality in that volatile sector where investment can come in large waves but quickly evaporate. What's more, some of the STEM majors who are struggling to find work today, including those in computer science, were also struggling with higher unemployment rates before generative AI took off. Meanwhile, other AI-exposed majors like mathematics, accounting, and business analytics are currently doing better unemployment-wise than they were pre-pandemic, Raderman wrote. 'Although computer science majors are in rough shape, many STEM and business majors have seen lower unemployment than pre-pandemic,' Raderman wrote in his analysis. Raderman is not the first to note that AI is unlikely to be a driving factor in recent college graduates' unemployment rates. Jaison Abel, an economist at the New York Federal Reserve, told NPR this month that while this job market for new grads is 'among the most challenging in the last decade, apart from the pandemic,' AI was likely not the main culprit, 'in large part because the adoption of AI so far has been fairly limited.' That's not to say AI won't be a bigger factor in unemployment in the future or that it isn't weighing on some workers' prospects now. Even President Trump's AI 'action plan' released this week noted that AI will "transform how work gets done across all industries and occupations, demanding a serious workforce response to help workers navigate that transition." The administration recommended the Department of Labor 'leverage available discretionary funding, where appropriate, to fund rapid retraining for individuals impacted by AI-related job displacement.'Emma Ockerman is a reporter covering the economy and labor for Yahoo Finance. You can reach her at Sign up for the Mind Your Money newsletter Sign in to access your portfolio
Reuters
5 days ago
- Business
- Reuters
US labor market steady, jobless claims at three-month low
WASHINGTON, July 24 (Reuters) - The number of Americans filing new applications for jobless benefits fell to a three-month low last week, pointing to stable labor market conditions, though sluggish hiring is making it harder for many laid-off workers to land new opportunities. The lack of material labor market deterioration likely gives the Federal Reserve cover to keep interest unchanged next week amid signs that President Donald Trump's aggressive tariffs on imports were starting to lift inflation. That was underscored by a survey from S&P Global on Thursday showing businesses asked higher prices for goods and services in July. Trump is pressuring the U.S. central bank to resume its interest rate cuts. Economists expect the Fed will keep its benchmark interest rate in the 4.25%-4.50% range after the end of a two-day policy meeting next Wednesday. The Fed cut rates three times in 2024, with the last move coming in December. "Trump 2.0 economic policies have not brought the economy to its knees yet although whether this continues to be the case going forward remains an open question," said Christopher Rupkey, chief economist at FWDBONDS. "The weekly jobless claims give Fed officials no cover whatsoever if they are seriously thinking of cutting interest rates at next week's meeting." Initial claims for state unemployment benefits dropped 4,000 to a seasonally adjusted 217,000 for the week ended July 19, the lowest level since April, the Labor Department said. Economists polled by Reuters had forecast 226,000 claims for the latest week. Claims have declined for six straight weeks and have pulled further away from an eight-month high touched in June. Unadjusted claims decreased by 45,319 to 215,792 last week. Though there have been some layoffs, employers have been mostly reluctant to fire workers, opting instead to scale back on hiring while awaiting more clarity on the Trump administration's protectionist trade policy. Uncertainty over where tariff levels will eventually settle continued to weigh on business sentiment in July, the survey from S&P Global showed, even as activity picked up. The survey's measures of prices paid by businesses for inputs as well as what they charged for goods and services rose this month. S&P Global said about 40% of service providers reporting higher selling prices explicitly mentioned tariffs, while just under half of their counterparts in manufacturing blamed the import duties. Employment levels at businesses remained steady, the survey also showed, aligning with the low jobless claims data. Stocks on Wall Street were mixed. The dollar gained versus a basket of currencies. U.S. Treasury yields rose. There is still a chance that claims could push higher. Claims have tended to increase in July, in part due to the temporary motor vehicle assembly plant shutdowns, whose varied timing can throw off the model the government uses to strip out seasonal fluctuations from the data. Though job growth has slowed from last year, the labor market remains stable. Nonetheless, the hesitancy by businesses to boost hiring has left many of those who are out of work to experience long spells of unemployment. The number of people receiving benefits after an initial week of aid, a proxy for hiring, increased 4,000 to a seasonally adjusted 1.955 million during the week ending July 12, the claims report showed. The so-called continuing claims covered the period during which the government surveyed households for July's unemployment rate. Continuing claims eased slightly between the June and July survey weeks. While economists said the elevated continuing claims reading posed an upside risk to the unemployment rate, they mostly expected it to hold steady at 4.1% this month. A decline in labor supply amid reduced flows of immigrants means the economy now only needs to create roughly 100,000 or fewer jobs per month to keep up with growth in the working-age population. The drop in the unemployment rate in June after holding at 4.2% for three straight months was mostly because people dropped out of the labor force. "Labor supply is growing much more slowly in 2025 due to immigration policy changes, so the unemployment rate can likely hold steady even if payrolls increase much more slowly in the second half of 2025 than in 2023 or 2024," said Bill Adams, chief economist at Comerica Bank. But high borrowing costs and economic uncertainty are hurting the housing market. New home sales increased 0.6% to a seasonally adjusted annualized rate of 627,000 units in June, a third report from the Commerce Department's Census Bureau showed. That was below economists' expectations for a rise to a rate of 650,000 units. Sales fell 6.6% on a year-over-year basis in June. The inventory of unsold homes on the market increased to 511,000 units, the highest level since October 2007, from 505,000 in May. That could make it difficult for builders to break more ground on new single-family housing projects. Government data last week showed single-family homebuilding dropped to an 11-month low in June while permits for future construction declined to more than a two-year low. Economists expect that residential investment, which includes homebuilding and home sales through broker commissions, likely remained a drag on gross domestic product in the second quarter. "We think renewed weakness in the housing sector this year, with residential investment likely to decline again in the second quarter, is the best evidence that rates are still at restrictive levels," said Veronica Clark, an economist at Citigroup.
Yahoo
5 days ago
- Business
- Yahoo
US applications for jobless benefits fall for sixth straight week, remain at historically low level
WASHINGTON (AP) — The number of Americans filing for jobless aid fell for the sixth straight week, hitting the lowest level since mid-April. The Labor Department reported Thursday that jobless claims for the week ending July 19 fell by 4,000 to 217,000. That's fewer than the 227,000 new applications analysts were expecting. Applications for unemployment aid are viewed as representative of layoffs. Earlier in July, the Labor Department reported that U.S. employers added a surprising 147,000 jobs in June, adding to evidence that the American labor market continues to show resilience despite uncertainty over President Donald Trump's economic policies. The job gains were much more than expected and the unemployment rate ticked down 4.1% from 4.2% in May. Though the job market is broadly healthy by historical standards, some weakness has surfaced as employers contend with fallout from Trump's policies, especially his aggressive tariffs, which raise prices for businesses and consumers. Most economists believe the import duties make the economy less efficient by reducing competition. They also invite retaliatory tariffs from other countries, hurting U.S. exporters and potentially driving businesses to freeze hiring or cut staff. The deadline on most of Trump's stiff proposed taxes on imports were extended again until Aug. 1. Unless Trump reaches deals with countries to lower the tariffs, economists fear they could act as a drag on the economy and trigger another bout of inflation. Companies that have announced job cuts this year include Procter & Gamble, Workday, Dow, CNN, Starbucks, Southwest Airlines, Microsoft, Google and Facebook parent company Meta. The Labor Department's report Thursday showed that the four-week average of claims, which evens out some of the weekly volatility, declined by 5,000 to 224,500. The total number of Americans collecting unemployment benefits for the week of July 12 remained stable, rising by just 4,000 to 1.96 million.
