The Reality Behind Job Reports

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Happy Tuesday, folks.

Heads up, I’ll be off next week.

Sending a more in-depth message tomorrow, but I really need to get back to strategizing this newsletter and its long-term trajectory.

Labor Market Outlook Headed into April 2024

If you look at the top-line numbers on each month’s job report, you’d think that the American economy is back, baby.

You’d also be dead wrong, bamboozled by selectively reporting the headline numbers.

Unemployment is still below 4% and has been for 25 months. 10 points for Joe.

The US also technically added 275,000 new jobs, also A+ without further context.

Unfortunately, reports have been ~optimistic~ as of late, only to be corrected downward significantly when adjustments can be buried beneath the next month’s hopeful report.

And this was assuming a traditional definition of “job.”

In reality, the metric refers to both full-time gigs and side hustles, and while nearly 50% of people are earning some extra cash on the side by writing newsletters, very few are surviving on supplemental income.

Over the last year, the economy has actually lost 284,000 full-time gigs.

And while nobody will shed a tear for the Stanford grads getting laid off from Meta, the market is obviously very different for FAANG employees, with more than 50K tech workers getting suddenly locked out of their work emails in 2024 alone, the highest rate since the 2001 dot com bubble.

How much of the current environment can be attributed to the introduction of AI tools?

Not to stoke fear, but quite a bit.

Now, much of the current churn is still post-pandemic correction, only natural considering the unsustainable hiring spree that many companies went on during the age of free money.

However, AI is disrupting the workforce. The CEO of Klarna caught slack for admitting that AI now performs the work of 700 employees, just months after the company let go of 700 employees.

Not every company has been quite so lucky, though. Many are still concerned with privacy and security.

Because of this, too many companies are putting restrictions on their employees, not allowing them to become more efficient. Then, these companies complain and say tech is just slowing them down, and the only way to remedy the situation is by automating the entire process.

At least for now, the combination of man + AI is 10x better than the power of either one of them alone.

Is there upside to all of this?

Perhaps not “up”side, but there’s a glass half-full perspective: there’s more talent available for lower prices than ever before.

Some of these talented individuals are also likely to start companies of their own, something which is a net positive for society.

AI may be the technology to finally lighten the work week, and if Bernie Sanders has it his way, your 40-hour work week will get slashed by the equivalent of a full working day without your pay falling.

Now, this “we’re more efficient so we can work less” belief has been around the block, and yet we’re working more than ever, so call me skeptical to say the least.

However, if you’re reading this, you probably don’t care much about that. You’re going to stay heads down and just use AI to become more efficient.

The lifestyle isn’t for everyone. That’s okay.

No, the labor market isn’t great right now.

I genuinely am sorry.

But my condolences are going to do nothing for you.

Future-proof yourself.

Put your head down and make shit happen.

Working hard doesn’t guarantee success.

But it does make it a whole helluva lot more likely.

Despite optimistic job reports suggesting a robust economy, a closer examination reveals a loss of full-time positions and a significant impact from AI on the labor market. The blending of full-time jobs with side hustles masks the true state of employment, signaling a need for adaptation in the evolving workforce landscape.

Have other feedback? Reply directly to this email and let me know!

Cheers to another day,

Trey