The Downturn in Labor Participation Is Not Due to AI
Gen AI does not account for the fact that the Labor Force Participation rate has dipped from 62.8% in November 2023 to 62.2% today. Gen AI has not been widely deployed across corporate America to where it could have such a meaningful impact, not even on the Software Development side of the equation. Much of the “AI” hype is a function of data center builds - which does not portend end-user engagement. Might the weak Labor Participation Rate be a function of a weak economy?
Could it be that 5 years of year-on-year price increases have taken their toll on the U.S. economy?
Tariffs can’t help as they are a sales tax on Americans.
The “Big Beautiful Bill” is a fiscal deficit-fostering abomination on an economy where fiscal debt exceeds GDP (to say nothing of unfunded entitlement obligations).
Credit card and mortgage delinquencies are up.
Companies are opting for PIKs rather than make interest payments.
Credit card delinquencies are up.
Mortgage delinquencies are up.
PIK Income is slightly down from Q1, but up over recent years as corporate credit is weak.
The punchline is that the U.S. economy is weak despite fiscal and monetary propaganda. The more policymakers try to prop up the economy and markets with various fiscal spending programs and monetary easing, the more the Dollar will suffer.