Current layoffs are driven less by AI-driven automation and more by financial strategy. Companies are cutting labor costs to free up budget for necessary AI investments and to project an image of being technologically advanced to investors.
The market is split. The 'contract' market includes tenured employees and locked-in prices from 2022. The 'spot' market includes new hires and resale inventory, which is trying to revert to 2019 affordability levels. This tension explains conflicting economic signals.
As consumers face price pressure, McDonald's is aggressively reclaiming its 'value' position. This strategic move pulls customers away from higher-priced fast-casual competitors, whose stock prices reflect this consumer shift and expose the vulnerability of the 'bowl lunch' economy.
The political coalition of working-class voters and the tech/VC industry could shatter over AI. A plausible 2028 scenario involves a Republican primary lane dedicated to an anti-AI platform, framing it as a job-killer and electricity-price booster, creating a significant division within the party.
Companies that over-hired in 2022 are now stuck with expensive employees who won't leave due to a weak job market. This creates a bottleneck, forcing companies to eventually lay off these 'seniors' to make room for new, cheaper 'freshmen' hires, signaling a turn in the labor market.
While historical ADP charts seem to track official Bureau of Labor Statistics (BLS) data, this is misleading. In the moment, ADP's estimates are often inaccurate. The firm revises its historical data months later to align with the official BLS numbers, creating an illusion of real-time accuracy.