Strong May Jobs Report
Last Friday, the May jobs report showed that total nonfarm payroll employment increased by 172,000 in May, versus an estimated gain of 85,000. The unemployment rate was unchanged at 4.3 percent. Job gains occurred in leisure and hospitality, local government, and health care. The strong report, combined with solid gains in March and April, has raised expectations that the Federal Reserve will raise the Fed Funds rate by a quarter point in January.
Source: Bureau of Labor Statistics, Wall Street Journal
US Manufacturing On The Rise
The institute for Supply Management (ISM) index for May was stronger than expected. The index hit 54, up 1.3 points from April. A reading above 50 signals expansion. The index measures the share of companies reporting growth. Interestingly, their index of employment growth rose 2.2 points but at 48.6 was still below the dividing line of 50 for growth.
Source: Institution for Supply Management
Airport Infrastructure Boom
Nashville International Airport kicked off a $40 million renovation project this week, to expand and upgrade terminal entrance areas — increasing escalators from six to sixteen to improve passenger flow. Major projects are also underway at JFK, LAX, and Houston Bush Intercontinental.
Source: Aviation Week Network
Mystery Tunnels At DIA
Denver Internation Airport has announced plans to convert dormant underground tunnels into pedestrian walkways. The project will convert sections of the airport’s underground baggage tunnels into pedestrian walkways connecting concourses A, B, and C. Construction is expected to begin in 2027, at an estimated cost of $300 million to $700 million, funded through airport revenue rather than taxpayer dollars.
Source: Wyoming News
WFH Costing Jobs
A recent study by the New York Federal Reserve found that “work from home” (WFH) is a bigger contributor to unemployment rates among young people than AI. Using data from an anonymous Fortune 500 company, they found a reluctance to hire younger, inexperienced workers for remote positions because it is harder for them to develop skills in an isolated setting. The feeling is that remote work is diminishing the long-term value of new graduates, pushing employers toward older candidates who already have experience in the pre-remote world.
Source: New York Federal Reserve Bank
Electric Energy Demand In The Spotlight Again
The electricity prices on the PJM Interconnection, which runs the grid from the Illinois prairie to the Jersey Shore, jumped 76% in the first quarter due to rampant demand from data centers. Even PJM’s own boss has called the current situation “not tenable,” saying his organization can’t ensure ample future electricity supplies while shielding residential consumers from rising bills. So far, no one has come up with a viable plan to address the situation other than regulators suggesting it may need to be broken up. Analysts have said that will not necessarily mitigate the problem and could backfire.
Source: Bloomberg
Apocalypse Or Creative Destruction?
Goldman Sachs CEO David Solomon has been a vocal skeptic of the AI employment doom narrative. “I’m not in the job apocalypse camp,” he said on a recent podcast. He rejects the idea that AI represents a fundamental threat to human employment calling it “just more of the normal course of creative destruction”. His own economists believe differently. Their research shows that AI substitution wiped out roughly 25,000 jobs per month in the past year, while augmentation added back about 9,000.
Source: Bloomberg, Fortune
