If you had a hunch that the economy is in the tubes lately, you’re not alone: Federal Reserve chair Jerome Powell agrees with you.
After his long-anticipated Federal Open Market Committee (FOMC) meeting on Wednesday, Powell told reporters that “job creation is very low, and the job-finding rate for people who are unemployed is very low.”
Per Fortune magazine, Powell added that a “significant number of companies” have been contributing to the malaise by laying off workers or pausing hiring. Their reason? None other than artificial intelligence.
“Much of the time they’re talking about AI and what it can do,” the Fed chair said about executives of large corporations. “We’re watching that very carefully.”
Powell’s cynical comments come after the Fed announced that it’d cut interest down to around 3.75-4.0 percent, the lowest level in three years, CNN reported. The Fed board has been facing something of an impossible situation over the past few months, juggling both rising unemployment and severe inflation.
In a healthy market economy it’s typically understood that employment and inflation have an inverse relationship — when one goes up, the other goes down.
In 2025, however, both are rising at the same time, placing an increased burden on working-class households, and putting the Fed in an impossible situation. As the number of people out of work goes up, corporations are able to use the pressure of hungry hands to keep wages for actual workers low.
The effect of this horrible job growth — fueled by the hype of the AI narrative — is an economy where the rich spend like sailors, while the poor get much poorer.
As Powell put it: “consumers at the lower end are struggling and buying less and shifting to lower-cost products,” while high income households and corporations enjoy the strongest stock market in history.
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