Episode summary
Job Seekers Not Leaning Into AI will Stay on Shelf Longer, Says ECRI's Lakshman Achuthan
Bloomberg Surveillance
· · 8 min · Guests: Lakshman Achuthan, Diane Swonk, Ben Bernanke, Alan Greenspan
Summary
The guest argues the US labor market is moving from a low-hire, low-fire setup toward firmer job growth, even if that looks unusual against the backdrop of a “jobless boom.” He says the economy almost slipped into recession in 2022, but jobs held up, and that lingering post-COVID distortions are still making the recovery hard to read. In his view, the headline is that employment is firming, but longer-term unemployment is rising because of skills mismatch.
He says that mismatch is increasingly tied to AI and productivity-enhancing work. Simple coding and simple research are getting squeezed, while workers who can “turbo charge AI” and help older colleagues use it are more hireable. The guest also says that if jobs keep firming, wage strength could eventually feed more persistent inflation pressure, reducing the near-term case for Fed easing.
He pushes back on the idea that wages are the key leading indicator for inflation, saying the relevant signals are in forward-looking gauges instead. He expects the combination of a cyclical upturn and heavy AI-related investment to support above-trend growth, even if the exact timing remains uncertain.
Key takeaways
- The guest says the labor market is shifting from low hire, low fire toward firmer job growth, even though the recovery still feels like a jobless recovery.
- He says long-term unemployment is rising because of skills mismatch, not because short-term layoffs are suddenly surging.
- He argues that workers who can use AI to boost productivity will be hired, while simple coding and simple research roles are under pressure.
- The guest warns that firmer jobs and wage dynamics could eventually create more persistent inflation pressure later this year.
- He says the Fed may want to be easy, but a firmer labor market removes some near-term cover for rate cuts.
Notable quotes
“We're moving from a low hire, low fire kind of job environment to firmer jobs growth”
“If you're not leaning into the kind of productivity enhancing stuff, if you're unable to do that easily, yeah, you're going to stay on the shelf long term”
“If you can. If you can turbo charge AI for your productivity and explain to the older people how it works, you're going to get hired”
“I think that's the next story. But underneath that or even before that, the whole reason for the Fed to be mellow is that the jobs market is not good”
How the episode opens
We're moving from a low hire, low fire kind of job environment to firmer jobs growth. There's a cyclical upturn. It's firming.
Absolutely. The reason? It feels strange.
It's because there's been a lot of strange things happening. Look, we almost had a recession in 2022. Output sales, income were all heading down, but jobs held in there.
So we didn't have a recession. And this is because of some structural stuff, post-COVID and so on and so forth. So as a result in this recovery, we're having kind of what feels like an echo of a jobless recovery.
It is definitely directionally firming. It's super tight on it. You see in the in the short term unemployment.
That's what you see. That's why the jobs numbers aren't falling. But in the longer term, unemployment, that's actually rising.
And that's, I think, related. Our research shows it's related to jobs mismatches. I mean, mismatch of skills.
If you're not leaning into the kind of productivity enhancing stuff, if you're unable to do that easily, yeah, you're going to stay on the shelf long term and suggest to me, I'm sorry. I went right to Alexis. The show.
Yep. Excuse me. I'm sorry.
I was focused on Duke, Michigan. This. So.
So what? What's it feel like here in terms of a lot of folks are saying, boy, the folks coming out of college, some of these emerging entry level jobs, they're just not there. Is that an A?
Is that true? And B, is that an AI related issue? Yeah.
Look, if you were coming out and going to do simple coding, you're in trouble if you're going to do simple research. Not going to really happen. Right.
If you can. If you can turbo charge AI for your productivity and explain to the older people how it works, you're going to get hired.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- jobless boom
- us labor market
- ai-driven business investment
- fed rate cuts
- jobless recovery comparisons
Companies and tickers mentioned
- ECRI
- KPMG
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Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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