February Jobs Report: U.S. Sheds 92K Positions; Unemployment Hits 4.4%
INDIANAPOLIS — The U.S. lost 92,000 jobs in February and the unemployment rate rose to 4.4%. That’s a sharp contrast to the estimated 50,000 loss.
University of Indianapolis economist Dr. Matt Will suggests these numbers are the byproduct of “creative destruction,” a theory where old economic models wither away to make room for the new.
Will argues that we are witnessing a transition from a traditional labor-heavy economy to one driven by Artificial Intelligence. He points to growth in wholesale and financial services as the “nugget” of hope in an otherwise tough report, noting that while fewer people are turning screwdrivers, the distribution of goods is actually up.
“We’re transitioning away from the traditional economy that we’ve seen into the next phase, which is AI-driven,” Will said in an interview with Tony Katz Today on Friday. “You’re going to have transitional unemployment. It’s not bad. But 92,000 people… that’s bad, especially when the goal was that the estimate was 50. So we see 120+ thousand swing. That is not insignificant, so we’ve got to be understanding about those people. They’ve lost their jobs.”
The shift is even more apparent in the U-6 unemployment rate, which includes people who have stopped looking for work or are unemployed; that number sits at 8.7%, as of February. Despite those out of work, Will remains optimistic about the long-term wealth being generated.
“Back in the early 20th century, we had people walking around saying, ‘Oh, that darn car industry. Look at all the horse and buggy makers. “They’re getting put out of business. We got to stop this.’ No, it’s okay. The horse and buggy industry had to leave…” he said.
Will was asked what kind of jobs would actually help Americans in the long run, and he gave a specific answer.
“In my institution where I teach, two years ago we’re teaching people in supply chain management to go into factories and produce goods,” Will explained. “Today, in that exact same major, we’re teaching the students to train an AI to do the things they were doing two years ago. We are teaching our students to develop it. You may be thinking, “Well, that’s going to lose jobs.” No. You’re going to lose a job on the front end, but you’re going to make jobs on the back end because your company will grow.”
Will also says 401k values are up.
“It’s because of this expanding growing economy that the wealth is being created,” he said. “We see it, but we also see the transition into a new economy, and therefore, people in the transition are tapping into that 401K. All the data is consistent. It’s all consistent with a wealth-producing, growing, transitioning economy.”
February Jobs Report: U.S. Sheds 92K Positions; Unemployment Hits 4.4% was originally published on wibc.com
