August Jobs Report

**SPEAKER_1** (0:02)
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**Tom Keene** (0:27)
Across America and around the world, this important jobs report, of course, joining us now, the foundation of our coverage, Claudia Sahm, Chief Economist, New Century Advisors. I love your opening line. You nailed it as you always do, Claudia.
The chairman saying in Jackson Hole, the labor market is stable. I was sitting there in the little bar off behind the grizzly bear, Claudia, you know the bar, in a table, a young kid from Kansas comes up, civil engineer, and he describes how all his friends are unemployed. Do we really have a stable job economy?

**Claudia Sahm** (1:05)
So in the way that Warsh is looking at the economy, certainly you can point to stability or balance, jobs or creation is keeping up with the slowing labor force.
But that perspective you got at the bar in Jackson Hole, like that is a really important one, and it is one that we are going to be grappling with more and more. In particular, we can see studies. The Dallas Fed had a great piece out this week, looking at drilling down into entry-level jobs in Texas, looking at young graduates. I mean, you can see this, and this is not, I think the impact of AI, the disruption in the labor market, that's where it's starting, but that's not where this ends. So it certainly is something to pay attention to, even if it's not like the Fed.

**Tom Keene** (1:50)
I got to get to the sink, because Damian's got a bunch of questions. Dr. Sahm, as simple as I can, there is not one single item my audience argues with me about, more than fancy diploma people from the University of Michigan, saying we're fully employed. Are we fully employed? I don't buy it for a minute.

**Claudia Sahm** (2:10)
Oh, boy. I mean, the full employment goal, this is such a big one, and I think this is one where economists might differ from regular people or even from the people who coined the term full employment, in that it's really not just about people who want jobs, having jobs, they need to be good jobs too. I think it's something to think about on a jobs day that's right before labor day.
We really do need to think about the quality of jobs, and there's a lot in the data that we get this morning that tells us about the quality of jobs. There's a lot in the conversation around AI that's really not about, will I have a job? It's like, will it be a good job? Will be one that pays well and is fulfilling to have. I think sometimes when we're arguing, it's because we're kind of talking past each other and looking at different parts of the data, but that really big picture conversation that maybe economists are not the ones to lead is one that we really do need to be having to right now.

**Paul Sweeney** (3:00)
Well, Dr. Sahm, let's get a bit more granular with that.
The data shows it's really manufacturing and construction. That's where the labor demand is coming from. It's all the service-oriented retail, hospitality, even healthcare, showing signs of softening here. Talk to us about what's going on underneath the surface. Is that because certain high-paying industries are getting dinged a little bit more than more traditional ones? I mean, what's going on here?

**Claudia Sahm** (3:23)
Right. So I think the Beige Book this time had a lot of color that gets right to this question. I think this is a place we're getting at some of the anecdotes and what's behind. The different industry patterns is helpful. Some of it, I don't want to push everything through an AI lens, but there is an aspect of it that in the timing of the AI, we're in the build-out phase. The Beige Book is full of examples of construction, skilled trades, lots of demand, not being able to keep up with the demand for workers in those areas.
But at the same time, some of these, again, entry level things that can be automated work easily, that's where some of the first pressure points are showing in less demand. So I think some of this is like tracing out the timing story. We do know from the AI build-out, like it may take a lot of jobs to build a data center, it doesn't take a lot of jobs to run a data center.