Jobs, AI and Tech Earnings

**SPEAKER_1** (0:02)
Bloomberg Audio Studios, podcasts, radio, news. Bloomberg Tech is live from the heart of Silicon Valley with Ed Ludlow in San Francisco.

**Ed Ludlow** (0:23)
This is Bloomberg Tech. Coming up, the jobs market is cooling with US employers unexpectedly cutting jobs in July, and AI may be part of the story. Plus, tech earnings back in focus will be joined by the CEOs of Twilio, Lyft, and DraftKings on their results. And OpenAI's first consumer device will be an AI smart speaker that will look like a doughnut.
We'll have the details.
This is what markets look like this Friday. Happy Friday to you. It is a story about jobs data, tech stocks pushing higher than NASA at 100 up, 8.4%, some outperformance in chips, and US 10-year yield. I picked the US 10-year yield because we saw a move across the curve, but why not? 4.64% on the yield. We need to get into the numbers. Is there an AI story? Bloomberg International Economics and Policy Editor Mike McKee is with us. Start with the numbers themselves. What did the data show this morning in simple terms?

**Mike McKee** (1:19)
Well, basically, we lost jobs for the first time in many months. 23,000 jobs last time we lost some jobs was in February. Now, why did that happen? A lot of it was government jobs. Local government education fell by 50,000. So it's not as bad as it looks on the surface. And unemployment fell to 4.1%.
The reason for that is because the labor force shrunk again, 240,000 fewer people looking for work, which pushed unemployment down to 4.1%.
If you're not looking for work, you're not unemployed. But the good news and the potential AI story here is that on the positive side of the jobs numbers, we saw a lot of hiring in the sectors that AI touches, especially in construction for AI data centers, et cetera. Specialty contractors and non-residential construction, almost 20,000 jobs in total as demand for workers in those areas continues to really ramp up. And then you look at the manufacturing side for computers and semiconductors, and they added jobs as well that we haven't seen in a number of other categories. So Ed, at this point, it looks like AI is one of the few areas that did well last month, and it doesn't show any signs of really slowing down.

**Ed Ludlow** (2:37)
The legend, Mr. McConomy, Bloomberg International Economics and Policy Correspondent. Mike McKee, thank you very much. Let's stay with That Jobs Impact. Joining us is Sarah Franklin, Lattice CEO, and Mike made the data so clear.
Where there were gains were in industries that are seeing AI capital deployed. Construction of data centers, for example. Your interpretation of those data points.

**Sarah Franklin** (3:03)
Our interpretation is that this isn't a crisis. This really is the recalibration. What you're seeing is the workforce changing and evolving as AI takes shape, not just in the tech sector, but also in manufacturing and construction. So this is really a recalibration that we've been anticipating.

**Ed Ludlow** (3:23)
How committed are companies big and small on your platform to sort of long-term hiring? The bit that I'm struggling to understand is like, in the short term, we get monthly changes in the numbers. But companies come up with plans for like this year, next year all the time. Do you see any evidence that they're restructuring the composition of those workforces?

**Sarah Franklin** (3:46)
Ed, we do. We see that companies are now through the chaos that we had the last several years, where there wasn't predictability. And now companies are planning the long-term. They're understanding what AI is good for and what it's not. They understand it much better than we did a year ago. So you're seeing companies recalibrate their workforce. You're seeing forward deployed engineers. You're seeing people understand how AI can help them. And people are also realizing that just because AI is here doesn't mean that the work isn't. You can't just lay off a lot of workers and the work go away. You still need the knowledge. You still need the trust that you have in your company and the culture. And you see companies saying, okay, we need our people, but we need to invest in their skills, not severance packages. We need to help them come along with this new trend. And so again, it's a recalibration of the workforce. And it's a transformation that every company is making and they're planning longer term.

**Ed Ludlow** (4:45)
How competitive is compensation right now? For existing workforce, but also if they are bringing people in in specific subsectors, the need to pay to get those best people.

**Sarah Franklin** (4:58)