First Friday: Jobs Fell by 92,000. But the Economy Is Still Growing?

Summary

Afford Anything – First Friday: Jobs Fell by 92,000. But the Economy Is Still Growing?

Host: Paula Pant
Guest: Dr. Ben Zweig, CEO of Revelio Labs
Date: March 6, 2026

---

Episode Overview

In this First Friday episode, Paula Pant breaks down confusing and seemingly contradictory labor market data: while official BLS statistics report a stunning loss of 92,000 jobs in February, others (like ADP) suggest job growth. The episode is organized into three analytical “layers” to give listeners a framework for understanding today’s economic environment: the household economy, markets and policy, and long-term structural forces (like AI).

Paula covers headline numbers on jobs, wages, housing, gas, and markets; explores why different reports show conflicting trends; discusses the Supreme Court ruling on tariffs and implications for business; and details how AI cost dynamics are reshaping work itself. Special guest Dr. Ben Zweig joins in the latter half, offering expert interpretation of the BLS jobs report and its implications for U.S. labor markets.

---

Key Segments & Discussion Points

1. Making Sense of Conflicting Jobs Data

[00:00–11:48]

• BLS vs. ADP:
  • BLS: U.S. lost 92,000 jobs in February, unemployment up to 4.4%.
  • ADP: Private employers added 63,000 jobs (best since Nov 2025).
• Why the discrepancy?
  • BLS covers public and private, ADP only private.
  • ADP shows concentrated hiring: education/health (+58k), construction (+19k).
    Other sectors like business services (–30k) and manufacturing (–5k) lost jobs.
  • “Job hopping” wage gains are at a record low (job switchers up 6.3% vs. 4.5% for stayers) — less of a salary incentive to jump jobs now.
• Other indicators:
  • JOLTS: Measures open positions, not employment. Job openings at 6.54 million (lowest since the pandemic), mainly falling in business services, retail, and finance.
  • Challenger, Gray & Christmas: Job cuts at 48,000 (55% lower than January), but layoffs concentrate in tech, education, manufacturing, transportation—AI cited in ~10% of layoffs.

"We see that the labor market is still growing, but there are signs of cooling. It's a low hire, low fire environment. That growth is becoming more uneven. It's more sector specific."
— Paula Pant [09:41]

---

2. Macro Layer One: Household Economy Updates

[11:48–15:32]

• Mortgage Rates:
  • 30-year fixed mortgage just hit 6% (up from 5.98%, down from 6.6% last year).
  • Driven by higher 10-year Treasury yields after military operations vs. Iran.
• Gas Prices:
  • Jumped $0.26/gallon in a week (now ~$3.25), diesel up $0.40.
  • Caused by Middle East conflict (Strait of Hormuz disruption) and usual spring demand.
  • Good news: prices have been at four-year lows; current rise is from a lower base.
• Stock Markets:
  • All major indices down amid inflation and growth worries.
  • Sectors hit hardest: airlines (fuel costs), retail (spending squeeze), small caps.
  • Historical pattern: “Markets tend to recover quickly from shocks associated with geopolitical conflicts.”
    — Paula Pant [10:55]
  • Long-term: Stock market up double digits three years in a row; productivity keeps case for future growth but recession risk remains.

---

3. Macro Layer Two: Policy and Markets

[15:32–23:05]

• 401(k) Hardship Withdrawals:
  • 6% of Vanguard participants took hardship withdrawals in 2025 (up from 5% prior year).
  • Automatic enrollment boosts participation; higher balances due to years of stock gains.
  • Used as emergency buffers—“retirement systems… are becoming short-term financial buffers.”
• Asset Owners vs. Non-owners:
  • Owners feel more secure (rising assets, real estate, 401k), but still squeeze on day-to-day cash flow.
  • Non-owners just see higher prices: “There's this bifurcation where people who own assets feel more secure... Meanwhile, people who don't own, all they've seen is that prices are higher.”
    — Paula Pant [17:44]
• Tariff Supreme Court Decision:
  • Strikes down Trump-era tariffs under 1977 law.
  • Lower court has ruled companies are entitled to refunds (~$200B possible).
  • Justice Kavanaugh: “IEEPA tariffs have helped facilitate trade deals worth trillions… The Court's decision could generate uncertainty regarding various trade agreements.” [21:53]

---

4. Macro Layer Three: The AI Revolution

[23:05–26:00]

• AI Cost Plummets, Usage Soars:
  • GPT-4 cost per million tokens fell ~98% in two years, from $60 to <$1.
  • OpenAI: Revenue soared from $1B to $12B in ARR.
  • Jevons Paradox in action: Lower costs drive much higher consumption, not less.
  • This creates new categories of work: “AI doesn't just replace human work... More work gets done because more work can get done.”
    — Paula Pant [24:10]
• Future Workforce:
  • Highest-value, “scarce” human skills: judgment, vision, taste, relationships, orchestration.
  • AI expansion now bottlenecked by energy and data center capacity.

---

5. Real-Time Reactions to the Jobs Report

[26:00–29:02]

• Official Commentary:
  • Kevin Hassett (White House): February snowstorms may explain weak jobs.
  • Mary Daly (SF Fed): Report “undermines” labor stabilization narrative but is “hard to interpret” due to weather.
  • Austan Goolsbee (Chicago Fed): “The time at which it makes sense to act [on rate cuts] keeps getting pushed back.”
  • Rick Rieder (BlackRock): Q1 GDP growth still expected at 2.5–3% despite jobs drop; suggests productivity gains.

---

6. Expert Interview: Dr. Ben Zweig Breaks Down the Jobs "Shock"

[33:49–48:14]

Headline Takeaways

• The Job Loss:
  • BLS shows –92,000 jobs; Zweig’s Revelio Labs –16,000; ADP +63,000.
  • Paula: “How do we square a month in which ADP is telling us a very positive story, but the BLS is telling us a very negative story?” [39:30]
  • Dr. Zweig: “If you just average [ADP, Revelio, BLS] together, it’s close to flat… That’s the best read.”
• Sector Analysis:
  • Healthcare & Education: Previously the main sources of job growth; now “shed 90,000 jobs alone... That’s kind of the big story.”
    — Dr. Ben Zweig [34:33]
  • Major layoffs: HCA, Kaiser Permanente led the drop.
  • Structural cause: Possibly due to unwinding of pandemic-era public investment and “Baumol’s cost disease”—resources shift to less productive sectors (like healthcare) as others become more efficient.

“Healthcare has been consistently the dominant source of new job creation. Is this signaling the beginning of the end of that?”
— Paula Pant [35:25]
“I think so, yeah... It always seemed a little bit unsustainable.”
— Dr. Ben Zweig [35:41]

Data Methodology Explained

• BLS: Government sample surveys.
• ADP: Private payrolls.
• Revelio: Big-data pulls from online profiles (LinkedIn, resumes, etc), tracks job changes and restatements of employment.
  • “When you average them together… you get a really good cohesive story about basic flatness, you know, slight weakening...”
    — Dr. Ben Zweig [41:31]

Why the Data Differs

• Layoffs & Hiring:
  • Layoff trackers (Challenger, Revelio) showed fewer announced layoffs—possibly positive for March.
  • JOLTS and job postings are backward looking.
  • The “headline” employment numbers disagree due to coverage (private/public), timing, and data source variation.
• Hiring vs. Attrition:
  • “We are in a low hire, low fire environment. Attrition rates have stabilized... Hiring rates are ticking lower.”
    — Dr. Ben Zweig [44:14]
  • Weakness now leans toward demand (fewer jobs posted/hired for) vs. just fewer people participating (“supply constraint”).
  • Dr. Zweig signals concern: “That [demand weakness] is a little bit more worrisome from a macro health perspective.” [45:46]

Demand vs. Supply Weakness

• Supply-driven: Fewer people in or entering labor market, immigration restricted, aging workforce, retired early, disheartened job seekers.
• Demand-driven: Companies pulling back on hiring due to weak sales outlook—a recession warning sign.

“I think probably deceptively healthy [unemployment rate] because we do have less employment, more clear weaknesses, and yet the unemployment rate hasn't really budged—which should make us think that there are people not even trying, maybe waiting and seeing, maybe retiring early.”
— Dr. Ben Zweig [47:22]

---

Notable Quotes & Memorable Moments

• “It's a low hire, low fire environment. That growth is becoming more uneven. It’s more sector specific.”
  — Paula Pant [09:41]

• “So ADP has plus 63 [thousand jobs], we have negative 16, BLS has negative 92. If you just average those together, it’s close to flat. … That’s close to optimal because they all come from different sources.”
  — Dr. Ben Zweig [41:19]

• “We're seeing higher savings rates and higher participation in 401ks, and we're also seeing a higher rate of hardship withdrawals... retirement systems ...are becoming short term financial buffers.”
  — Paula Pant [16:18 and 17:18]

• “AI doesn't just replace human work. It goes beyond that. It begins performing categories of work that previously were too expensive to attempt.”
  — Paula Pant [24:10]

• “Attrition rates have stabilized at a low level. Hiring rates are ticking lower. … It’s really a lack of inflows, less about separations and layoffs.”
  — Dr. Ben Zweig [44:14]

---

Timestamps of Key Segments

• [00:00] — Why the jobs numbers are shocking and contradictory
• [03:00] — Three layers of economic analysis
• [05:00] — Breakdown of BLS, ADP, JOLTS, and Challenger reports
• [09:00] — Big picture: signs of labor market cooling
• [11:48] — Mortgage and gas price impacts from geopolitical events
• [15:32] — Surge in 401(k) hardship withdrawals and wealth inequality
• [19:00] — Supreme Court tariff decision and potential billions in refunds
• [23:05] — The AI revolution: costs, adoption, Jevons Paradox, and future of work
• [26:00] — Real-time hot takes from top economists on jobs data and inflation
• [33:49] — Dr. Ben Zweig interview: sector breakdown, methodology, reconciling conflicting reports, demand vs. supply-driven weakness

---

Final Takeaways

• Labor market appears flatter and weaker than official numbers suggest. The “headlines” each miss part of the picture; combining private, public, survey, and big-data estimates gives the truest sense—flat or slightly declining jobs.
• Healthcare’s era as the jobs engine may be ending. Dependence on healthcare sector job growth is unsustainable.
• Demand-side weakness is a red flag. Declining pay growth and hiring point to risk of recession, not just labor force shrinking.
• Asset owners and non-owners are experiencing the economy very differently. Top-line gains coexist with day-to-day financial stress for many.
• AI is in a phase of exponential adoption and new business formation, not just displacement.
• Major policy moves (Supreme Court, tariffs) and global shocks (Middle East conflict) are hitting household budgets and investments.
• Listeners should watch for more job market volatility, keep an eye on sectors beyond healthcare, and anticipate continued rapid change from AI and global events.

---

To hear directly from Dr. Zweig and Paula on how to interpret these wild jobs numbers, listen from [33:49] onward.

Transcript

[Paula Pant]

The jobs report came out today and it is wild. The US lost 92,000 jobs in February, according to BLS data. That is a huge shock after looking at the ADP report which came out on Wednesday, which told a totally different story. It told a story of the US gaining 63,000 jobs. So how do we square the circle? How do we make sense of a world in which the data is telling us such different things? Well, we're going to talk about that on today's episode. Welcome to the Afford Anything podcast, the show that knows you can afford anything, not everything. This show covers five pillars Financial, psychology, increasing your income, investing, real estate, and entrepreneurship. It's double eye Fire. I'm your host, Paula Pant. I hold a Master's in economic journalism from Columbia. And once a month, on the first Friday of every month, we host an episode in which we take a look at the broad macroeconomic trends that are affecting us. What's affecting your wallet, your mortgage rate, your gas prices, your ability to get a job or ask for a raise at work? What are the things that are affecting that? At the big picture level, we answer

[Sponsor/Ad Voice]

that question on the first Friday of every month.

[Paula Pant]

So in today's episode, I'm going to walk through several big economic stories, but I'm going to organize them into three layers of the economy so that you've got a framework for thinking about them. Layer number one, we're going to talk about the household economy, jobs, wages, housing costs, gas prices, 401ks. Layer number two is markets and policy. Things like tariffs, stock markets, how investors are reacting to big geopolitical shocks. And then layer number three is the long term forces that are reshaping the economy. Most predominantly AI. How is that layer affecting everything? We're also going to talk to Revelio Labs CEO Dr. Ben Zweig. He will join us at the end of the episode to shed some light on today's BLS jobs report. Let's kick off. Data from the BLS shows that the US lost 92,000 jobs in February and that the unemployment rate ticked up to 4.4%. That's just slightly higher than where it's been previously. It was at 4.3%. 4.4 is still a number that's considered healthy, but it's getting towards the top end of healthy. You don't want it to go too far beyond that. The Fed doesn't set an official target unemployment number, but many economists talk about unemployment as though they want it to be somewhere within that 4 to 5% range. There is no official target number as opposed to with inflation. Officially, the target is 2%. In any event, the BLS report came as a bit of a shock because economists were expecting a gain. People were expecting a gain of around 60,000 jobs, and that was largely because of the ADP report, which came out two days prior, came out on Wednesday. The ADP report, which only uses private sector data, shows that private employers added 63,000 jobs in February and that is the best monthly gain since November of 2025. What it also found, though, is that hiring is not broad based it was concentrated in just a couple of sectors. According to the ADP report, education and health services added 58,000 jobs, construction added 19,000 jobs. Meanwhile, in a couple of other sectors that weren't doing quite as well, professional and business services lost 30,000 jobs and manufacturing lost about 5,000 jobs. So hiring was concentrated in just a few sectors, according to the ADP report. It found that pay for workers who stayed in their current roles grew 4.5% year over year and pay for workers who changed jobs grew 6.3%. And that means that the pay advantage for switching jobs, according to the ADP report, has hit a record low, which means job hopping is not producing the same salary gains that it did earlier in the recovery. Meanwhile, there is a different survey. It's called JOLTS Job Openings and Labor Turnover Survey. It is conceptually different from the BLS report and the ADP report because the JOLTS data is about job openings, it's not about employment. So conceptually they're measuring different things. But it's interesting to look at both of them together because it paints a fuller picture. And data from the JOLT survey, which is two months older, it's data from December, which means it's tracking data that's two months older than the BLS and ADP reports, which is tracking February data. JOLTS data lags quite a bit, but jolts data found 6.54 million job openings. That's the lowest level since the pandemic began, so it does not paint a particularly pretty picture. And the JOLTS data shows that job openings dropped, particularly in professional and business services, retail and finance, and insurance. It also found that the quits rate is holding around 2%, meaning that fewer people feel confident about voluntarily leaving their jobs again. The JOLTS data reflects numbers as of December, which is the most recent set of numbers that are available. The numbers that will reflect January are expected to be made available on March 13th. Jolts data always lags BLS data, which is a little bit annoying because you can, you know, in real time, never quite compare apples to apples. There's also data from Challenger, Gray and Christmas. They track layoffs. And the Challenger report found that employers announced 48,000 job cuts in February. The good news is that's actually 55% lower than January. But they did find that layoffs in some industries are rising. Those industries include tech, education, industrial manufacturing and transportation. Of course, the big story that was on people's radar was the Jack Dorsey layoffs. Jack Dorsey is the CEO of Block and he cut about 40% of the workforce in one big swoop. He made that announcement about a week ago and cited AI as his reason for doing so. In fact, according to the Challenger report, AI was cited in 4600 job cuts. 4680 if you want the precise number. Job cuts in February, and that's about 10% of total layoffs that month. The Challenger report also stated that hiring plans are down 56% year to date as compared with last year. We put all these reports together, what do we see? We see that the labor market is still growing, but there are signs of cooling. It's growing a little bit, but more slowly. It's a low hire, low fire environment. That growth is becoming more uneven. It's more sector specific. At the end of today's episode, we're going to discuss all of these reports, this aggregation of reports with Dr. Ben Sweg, who leads a workforce intelligence company. So they Revelio Labs, which also gather, they also gather their own report. So that is coming up at the end of today's episode. The average 30 year fixed mortgage rate rose to about 6% this week. That is slightly higher than 5.98% last week, but it's still lower than the 6.6% that it was at a year ago. So this 200ths of a percentage point increase is not enough to change affordability mathematically, but psychologically, crossing the 6% threshold can feel significant to buyers. Now, mortgage rates tend to track the 10 year Treasury. And mortgage rates are up because the 10 year treasury is up. It rose from 3.96% up to 4.14% after military operations began against Iran. Yields rose in part because oil prices increased. And investors are worried that higher energy prices could trigger or reignite inflation. And if inflation goes up, the Fed might be less likely to cut interest rates, which pushes bond yields up. So mortgage interest rates are sensitive not just to Fed policy and not just to housing demand, but to global events that influence inflation expectations. Speaking of oil prices increasing, gas Prices are up. Gas prices have jumped by 26 cents a gallon in the past week. The national average is now around $3.25 a gallon. Diesel prices also rose by about 40 cents. The main driver of that is the war involving Iran and disruptions to oil transportation. Tanker traffic through the Strait of Hormuz has slowed and that strait normally carries about one fifth of the world's oil supply. The estimates right now suggest that the world may be losing access to around 20 million barrels per day due to shipping disruptions. I should note though that beyond these geopolitical events, gas prices also tend to rise in the springtime because generally in the spring, driving demand increases. So we've got two things that are happening at the same time. There's the seasonal trend of this is the time of year when gas prices tend to go up anyway. And then we've also got these geopolitical shocks. I should also add, as we've discussed on previous First Friday episodes, that going into this, gas prices have been at record lows. In fact, on I think the most recent First Friday episode, we announced that gas prices had hit. It was either the last First Friday episode or the one before that. It was one of the two most recent First Friday episodes. We announced that gas prices hit a four year low. So the good news, the silver lining, is that yes, gas prices are up, but they are up from a four year low. All of this put together, higher gas prices, inflationary worries, a weakening labor market, all of this put together has caused the stock market to react with jitters. All of the major stock indices, the Dow Jones, the S&P 500, the NASDAQ are all down at the sector specific level. Airlines dropped because fuel is a huge cost. So airline stocks are down. Retail stocks also fell because higher gas prices leave consumers with less money for discretionary spending. Small cap stocks fell because generally when investors are worried about economic growth, small cap tends to be the first to get hit. But we should note that markets tend to recover pretty quickly from shocks associated with geopolitical conflicts. As of the time of this recording, we've seen a bit of market decline. The overall trend for the stock market, when we zoom out and we take a look at the view as measured in years. Certainly we've seen over the past several years the stock market has had double digit growth every year for the past three consecutive years. And particularly given productivity advancements, there's a strong case that the markets may continue to grow. That said, if you look through the jobs data, there is something in there that points to a recession indicator. And this is something that Dr. Zweig notes. We're going to discuss that at the end of today's episode. First, we're going to take a moment here to hear from the sponsors who make this show possible. And when we return, we are going to dive into 401k withdrawals. We'll discuss the Supreme Court decision about tariffs and we will talk about the impact of AI on the workplace. All of that is coming up next.

[Sponsor/Ad Voice]

I live in an apartment in Manhattan. 600 square feet which means my design style is highly functional. I got a bunch of shelving from Wayfair so that I would have more storage space. I got a daybed from Wayfair. It kind of serves as a couch but also a guest bed. But also it's got drawers underneath and has a built in bookshelf. So it serves many purposes in one piece. So for me, I use Wayfair for my home aesthetic of functional and organized. But for you, you can use it for whatever it is that you're looking for. Maybe you have an esthetic like mid century modern or farmhouse, or maybe you need more playroom organization for your kids spaces or you want to make some furniture updates or you need a more organized closet system or you need garage organization or a better work from home space like whatever it is you need. Wayfair makes it really simple to narrow down to exactly what works for your style and your budget.

[Paula Pant]

They've got the ability to search for

[Sponsor/Ad Voice]

anything and they've got great filters so that you can narrow their massive selection down to exactly what you're looking for. Pot of pieces have a lot of reviews too so you can read reviews from real users which helps you shop with confidence, find furniture, decor and essentials that fit your unique style and budget. Head to Wayfair.com right now to shop all things home. That's W A Y-F A I R.com Wayfair Every style, every home

[Paula Pant]

life comes at you fast.

[Sponsor/Ad Voice]

It changes quickly. And so maybe you got a new job and now you can work from home and that means you need a home office. Maybe your family is growing and you need a nursery. Maybe you got a dog and now you want a backyard. When life changes and what you're looking for in a home changes, you need the right tools to find something that's a good fit for you. And that's where realtor.com can help. They have over 500,000 new listings each month and and smart tools to make your home shopping easy. Realtor.com is the pro's most trusted app.

[Paula Pant]

It's easy to use. You can search and sort and filter for exactly what you're looking for, where you're looking for it in your area, and your price point.

[Sponsor/Ad Voice]

I often use it when I'm looking at different cities and trying to get a sense of what the inventory is like in a given city or in a given neighborhood or location. I'll browse just to study the options to see what's out there. Find your next dream home. Start searching now. Download the realtor.com app today. Pro's most trusted app based on August 2025 proprietary survey over 500,000 new listings every month based on average new for sale and rental listings from July 2024 to June 2025. Despite the snow on the ground, we're getting closer and closer to spring. And one of my favorite springtime rituals is spring cleaning. When you're spring cleaning.

[Paula Pant]

For me, that's when I realized I

[Sponsor/Ad Voice]

want to clean up my long term to do list. If one of the things that's on your long Term to do list is making sure that you get the right insurance, policygenius can help with that. Because making sure that your loved ones are protected in the long term like that can be overwhelming. It's a big responsibility and the right insurance can make that easier. PolicyGenius is an online insurance marketplace that lets you compare quotes from some of America's top insurers side by side for free. They help you find your most affordable policy that fits your needs and they have thousands of five star reviews on Google and Trustpilot. Protect the life you've built with Policygenius you can see if you can find 20 year life insurance policies starting at just $276 a year for $1 million in coverage. Head to Policygenius.com to compare life insurance quotes from top companies and see how much you could save. That's policygenius.com.

[Paula Pant]

Welcome back. We're seeing a record number of 401k hardship withdrawals. 6% of workers who are enrolled in Vanguard Plans took hardship withdrawals in 2025. That is up by one full percentage point from the previous year. It's up from 5% of workers taking hardship withdrawals in in the prior year. One percentage point is a lot, particularly when you're talking about moving from 5% to 6%. Right? That is proportionately a very significant jump. Now if you're wondering, wait a second, what is a hardship withdrawal? A hardship withdrawal from a 401k is a withdrawal that is allowed for a specific financial emergency, such as major medical expenses, or avoiding foreclosure, or avoiding eviction. And so what we're seeing through this big increase in hardship withdrawals, we're seeing a couple of stories coalesce together. One is that yes, many households are facing big financial shocks, but the other is that more people are participating in retirement accounts. The big structural change underlying this is that more and more workers now have automatic enrollment in retirement plans. That did not used to be the case. It used to be that workers had to opt into 401k plans. And now it's becoming more common that workers are default enrolled and need to opt out rather than opt in. So we're seeing higher savings rates. This is the good news piece of this. We're seeing higher Savings rates in 401ks, higher 401k participation. That's the good news. But then the flip side of that is, is that many households are treating retirement accounts as something of an emergency safety net. So it isn't all bad. The silver lining to the story is that 45% of participants increased their savings rates in their 401 s last year. So that same Vanguard data is showing both a positive and a negative. We're seeing higher savings rates and higher participation in 401s and, and we're also seeing a higher rate of hardship withdrawals. And then at the broader societal level, we're seeing retirement systems that are really designed to not be touched until you're in your 60s are becoming short term financial buffers. And so the role that 401ks play in the lives of some households is starting to become more integrated. I think a part of what is also happening is that we have, I talked about this on the last episode. We have an economy in which the stock market had double digit growth for the last three consecutive years. And so many people, especially people who enrolled in 401ks prior to the pandemic, many people have seen their 401k balances grow substantially over the past five or six years because we've seen such incredible economic growth between the pandemic and today. By that same token, people have not seen their wages necessarily keep up with inflation. And of course there's a difference between the macro data and the lived experience. And many people certainly have felt as though their wages have not kept up with the rising cost of groceries, of housing, of some of these core staples that are necessities in living. And so you have a situation where many people are at a day to day level, are feeling cash strapped, but on paper, they have a high net worth. And so when you have that kind of situation, you know, we talked about this in the last first Friday episode. There's definitely a big difference between people who own assets and people who don't. There's this bifurcation where people who own assets feel more secure, you know, that their home prices have gone up, their 401k balances have gone up. Sure, their wages feel a little flat and prices at the grocery store certainly feel a bit high. But at a minimum, they have the reassurance that comes from knowing that on paper their net worth is doing well. So that's been the economic story for people who own assets. And meanwhile, people who don't own, all they've seen is that prices are higher. They don't own real estate, they don't own index funds, they haven't seen paper gains because they don't have assets on paper. I talked about in the last first Friday episode how that can create this disconnect and might be part of the explanation as to why consumer sentiment is so bad in spite of strong economic data and strong stock market performance. And so that is part of the story that's happening here. But I think what we're seeing with the 401k hardship withdrawals is a separate part of this story, which is that even among people who have paper assets, because prices have risen and that means cash is tighter, people with paper assets are now put in a position where they have to tap those assets in order to be able to pay their bills. As you've no doubt heard by now, the Supreme Court struck down the tariffs that President Trump imposed in a series of executive orders. The vote was 63. The justices ruled that the tariffs exceeded the powers given to the president under a 1977 law which provides the president with the authority to regulate commerce during national emergencies that are created by foreign threats. The court did not weigh in on on whether or not the federal government should provide refunds to importers who have paid the tariffs and if so, how. The Supreme Court did not weigh in on that. That amount is estimated to be around $200 billion. While the Supreme Court has not ruled on that, a lower court has. In a follow up ruling, a federal Judge in the U.S. court of International Trade ruled that companies who paid those tariffs are indeed entitled to refunds. The ruling was made in a case that was brought forth by a Tennessee based filtration company called Atmos Filtration. And the judge stated that his court will hear cases related to refunds for these Tariffs. It should be noted that in his dissenting opinion, Justice Brett Kavanaugh mentioned that the federal government, quote, may be required to refund billions of dollars to importers who paid the IEEPA tariffs, even though some importers may have already passed on costs to consumers or others, end quote. He also noted, quote, IEEPA tariffs have helped facilitate trade deals worth trillions of dollars, including with foreign nations from China to the United Kingdom to Japan. The Court's decision could generate uncertainty regarding various trade agreements, end quote. When he talks about the iepa, that is the International Emergency Economic Powers act, that is the act that authorizes the President to use the law to deal with, quote, unusual and extraordinary threats, end quote. The President had cited large trade deficits as constituting an unusual and extraordinary threat to the national security and economy of the United States. The Court's decision is in line with previous decisions. So previously, the Supreme Court had also rejected a similar argument that about the

[Sponsor/Ad Voice]

use of emergency powers in a student loan forgiveness case.

[Paula Pant]

AI costs are falling dramatically. One study estimates that the cost of GPT4 output has declined by roughly 98% in about two years, dropping from about $60 per million tokens to under $1 per million tokens. Despite those falling prices, AI revenue has surged. So OpenAI reportedly grew from about 1 billion in annual recurring revenue to 12 billion in ARR over the span of those same two years. And this perfectly fits an economic explanation that's known as Jevons Paradox. Jevons Paradox states that when the cost of a resource dramatically drops, usage doesn't fall. Rather, the total consumption of that thing increases dramatically. For example, in the 1800s, coal became significantly cheaper. And as a result, Britain used more coal, not less. Which meant that even though coal became dramatically cheaper, the coal industry grew and produced more revenue. And so we're seeing the same thing Jevons paradox happen with AI costs. AI costs have fallen substantially in the last two years, but although costs have dropped dramatically, usage has risen. And so the implications for this is that AI doesn't just replace human work. It goes beyond that. It begins doing performing categories of work that previously were too expensive to attempt. So more work gets done because more work can get done. Because the type of work that no one even bothered doing because it was just too expensive to even try to do, it can now be attempted, which is actually a great news for workers because it means that orchestration is needed for this new set of tasks that didn't previously exist. It means that new companies and in fact, entire new industries could emerge that were previously just too expensive to even try. And so as intelligence becomes cheaper and cheaper, the scarce skill that only humans uniquely can do is having judgment, having vision, having taste, knowing what questions to ask, setting the course, deciding what agentic AI should be built and what it should be used for, like that, that vision, setting and then building the human to human relationships that enable all of this to happen. So relationships and orchestration, you know, relationships and vision, those become the, the roles that humans fit into. And the potential good news is that entire categories of work that we can't even imagine might begin to pop up.

[Sponsor/Ad Voice]

New industries that don't exist today.

[Paula Pant]

Industries that no one would have ever dreamed about because it would have just been far too cost prohibitive. If you had to use human labor for everything, those industries may start to emerge. So the question as we move forward is how efficiently can energy be converted into computation? Because that is the constraint around AI progress. AI systems depend on electricity and data center infrastructure. And so the long term expansion of AI is going to be shaped by the availability of energy. Okay, in the time between when I started recording and now, some new commentary has come in about this morning's jobs report. Kevin Hassett, the director of the White House National Economic Council, attributes the major snowstorms of February to the job weakness. Meanwhile, the president of the Federal Reserve bank of San Francisco, Mary Daly, says that the jobs report undermines the idea that the US labor market is stabilizing. She did emphasize that people should not put too much weight on one month of data. And she made a note that there are details within the report that make it difficult to interpret and also that the results do partially reflect disruptive winter weather. Speaking to Bloomberg, she said that she's worried that the labor market, quote, may be a little weaker than we have seen so far. But I've been worried about that since last summer, end quote. Meanwhile, the president of the Chicago Fed, Austan Goolsbee, called the jobs report, quote, a tough mission, but said that he hopes that the Fed could resume rate cuts by the end of the year. When it comes to when the Fed will make their next rate cut, he said, quote, I think the time at which it makes sense to act keeps

[Sponsor/Ad Voice]

getting pushed back, end quote.

[Paula Pant]

Meanwhile, Rick Ryder, the chief investment officer for fixed income at blackrock, said that he expects economic growth for the first quarter to come in looking pretty good. He's estimating growth of about 2.5 to 3%. And he noted that that is a disconnect from the job market. So while jobs are flat or declining. We're still getting good economic growth and what that means is that productivity is climbing. We're getting more done with fewer people. Coming up next, we hopped on a call with Dr. Ben Zweig to talk about today's shocking jobs report, the startling numbers that many people were not expecting, certainly especially not after looking at the ADP numbers on Wednesday. We recorded this at 9am Eastern. The BLS releases its jobs data at 8:30am Eastern on the first Friday of every month. We hopped on a call with him half an hour after that. With that data hot off the press, newly released, we wanted to get his fresh take on what those numbers mean. And that conversation is coming up right after this.

[Sponsor/Ad Voice]

One of the toughest parts of starting a business is all the doubt. Both the doubt that you feel internally

[Paula Pant]

and the doubt frankly that your friends

[Sponsor/Ad Voice]

and family often express that they're well meaning, they want you to be safe.

[Paula Pant]

But when you say I'm going to

[Sponsor/Ad Voice]

quit my job and go all in on this business, often they're like, are

[Paula Pant]

you sure about that?

[Sponsor/Ad Voice]

So it becomes essential to believe in yourself, to believe in your vision and to have great tools and resources around you. And a partner like Shopify on your side can help a lot. Shopify is the commerce platform behind millions of businesses around the world and 10% of all e commerce in the US from household names like Mattel and Gymshark to brands that are just getting started, you can tackle important tasks in one place. We're talking everything from inventory to payments to analytics. So you don't need to save multiple websites or figure out what platform is hosting the tool that you need. Everything is all in one place, which makes your life easier and and it makes your business run more smoothly. And they have the iconic purple shop pay button, the one that's used by millions of businesses around the world. Shopify has the best converting checkout on the planet and they have award winning 24. 7 support. It's time to turn those what ifs into with Shopify today. Sign up for your $1 per month trial today at shopify.com Paula go to shopify.com Paula that's shopify.com Paula

[Paula Pant]

the start of a new year, the first quarter

[Sponsor/Ad Voice]

of a new year. Even that first season is a really good time to think about your financial goals for the year ahead and to see how that's progressed since the year began and refine it as needed. Do you want to buy a home?

[Paula Pant]

Do you want to save more for retirement?

[Sponsor/Ad Voice]

Do you want to put aside money for your kids education well, Set yourself up for financial success this year. Monarch is the all in one personal finance tool designed to make your life easier. It brings your entire financial life, budgeting accounts and investments, net worth and future planning together in one dashboard on your phone or laptop. Feel aware and in control of your finances this year and get 50% off your monarch subscription with Code Afford. One of the things I like about

[Paula Pant]

it is how easy it is to use.

[Sponsor/Ad Voice]

The user interface is very intuitive and you can see exactly where your money is going. They have automated tracking and very clear projections so you can see yourself getting

[Paula Pant]

closer to reaching a goal, whether that's

[Sponsor/Ad Voice]

becoming debt free or hitting a savings milestone.

[Paula Pant]

They've got great data visualizations.

[Sponsor/Ad Voice]

We're talking pie charts, line charts, bar graphs. You can get a visual picture of

[Paula Pant]

your portfolio performance in relation to the

[Sponsor/Ad Voice]

S&P 500, and you can share your account with your spouse, partner and financial advisor at no extra charge. Set yourself up for financial success in 2026 with Monarch, the all in one tool that makes proactive money management simple all year long. Use code [e-mail] for half off your first year. That's 50% off your first [e-mail] with code afford.

[Paula Pant]

Hiring isn't just about finding someone willing

[Sponsor/Ad Voice]

to take the job.

[Paula Pant]

I need the right people, person with the right background who can move our business forward. If I wanted candidates who match what I'm looking for, I'd trust Indeed Sponsored Jobs. In fact, I did. I used Indeed Sponsored Jobs to make two hires. One was for an executive assistant and the other was for a customer support and operations assistant. For both positions, we had the job posting up for less than 48 hours and within that time we got so

[Sponsor/Ad Voice]

many applications we got what we needed.

[Paula Pant]

So if you're hiring, Indeed is all you need. Give your job the best chance to be seen with Indeed Sponsored Jobs. Sponsored Jobs boosts your post for quality candidates and that makes a big difference. Sponsored Jobs posted on indeed are 90% more likely to report a hire than non Sponsored Jobs. And more than 1.6 million companies sponsor their jobs with Indeed. So our two hires have both been working for us for several months now. They're great, wonderful, part of the team, and we found them through Indeed Sponsored Jobs. Spend more time interviewing candidates who check all your boxes. Less stress, less time, more results now with Indeed Sponsored Jobs and listeners of this show will get a $75 sponsored job credit to help get your job the premium status it deserves@ Indeed.com Paula just go to Indeed.com Paula right now and support our show by saying you heard about Indeed on this podcast. Indeed.com Paula.

[Sponsor/Ad Voice]

Terms and conditions apply.

[Paula Pant]

Hiring. Do it the right way with Indeed. Welcome back. We are joined in the second half of the show by economist Dr. Ben Zweig, who you've heard from the last two episodes. Tell us about the Jobs Friday report.

[Dr. Ben Zweig]

Yeah, it's a big one. Huge declines. I mean, not that huge in terms of like, overall headline numbers, but huge relative to where we've been in the last year or two. We are down 92,000 jobs according to the BLS. My own firm had us down 16,000 jobs and ADP had us up 63. So some disagreement there. Yeah. Either way, I mean, it is a. It is a weak labor market. We are shedding jobs faster than any rate we have in the past few years.

[Paula Pant]

In terms of the overlap with the today's Jobs Friday report, when it comes to the sectors that are shedding the most jobs, how does that map onto your data and as well as the ADP data?

[Dr. Ben Zweig]

Mostly in agreement. I mean, the caveat for ADP is that it does not include public sector. That's a big limitation because so much of the gains in the last year and some of the declines this month are in healthcare and education. That is the sector that has been driving so much of the gains in the last year, especially according to BLS, and that reversed so that shed 90,000 jobs alone in that sector. That's kind of the big story. What we're seeing is kind of more flatness there. But we also, I think because this sector was so dominant in driving some of the changes in the last year, we kind of split it out. Healthcare is one, education another, and find that it's really mostly driven by healthcare. HCA is the biggest, is the employer setting the most jobs. Kaiser Permanente is another. Those are the firms that are really driving us.

[Paula Pant]

Healthcare. Over the last year, which is about as long as I've been recording these first Friday episodes, healthcare has been consistently the dominant source of new job creation. Is this signaling the beginning of the end of that?

[Dr. Ben Zweig]

I think so, yeah. Yeah. I mean, that. That's what it seems like to me at least. It always seemed a little bit unsustainable that so many of these gains were coming from healthcare, which is a little bit of an idiosyncratic industry. It's a little bit divorced from the sort of real economy, if you want to put it that way, because, you know, the economy that's driven by consumer demand and investment and all that kind of seemed like you Know, an artifact of public investment. That's something that can't keep rising in a secular way.

[Paula Pant]

Right. Why was, over the past year, why was healthcare the runaway breakout? You know, why. Why then specifically?

[Dr. Ben Zweig]

I don't know if anyone has a great answer. I mean, I think there was kind of leftover public investment from the infrastructure bill from years past. So they were kind of getting more public investment. That's kind of the base reason. But there is a deeper reason that economists have been floating, which I don't know if it's really the case, but I'll put the theory out there and you can judge on your own. But it's based on this phenomenon known as Baumel's cost disease. So this idea is that when there is productivity in some sectors, then an outsized share of the resources go to those less productive sectors. So it's kind of a relative productivity story that when we see so much productivity in tech and software, then that kind of increases the relative cost for these less productive industries like healthcare, like education, like construction, manufacturing, that just don't have these big booms in productivity. So it's kind of a resource reallocation story. Let you be the judge whether, whether you buy it. I don't fully think that that could tell the whole story because that is more of a longer term process. But that is at least a theory that gets floated.

[Paula Pant]

Would I call that like a corollary to Jevons paradox in a certain sense?

[Dr. Ben Zweig]

Yeah, yeah. It's an interesting. I think they're very similar in nature in that they're these like seemingly statistical paradoxes. I mean, I think of Jevons paradox as something that affects the sectors that are rising in productivity.

[Paula Pant]

Right.

[Dr. Ben Zweig]

That we, we end up spending more, not all the time, but we can end up spending more in sectors which have big cost reductions. So you know the example if, if gas prices fall by half, maybe you drive more than double the amount and then actually spend more on gas as the price falls. You know that that would be an example of something in consumption as we get more productive in it. I think in some way Baumlow's cost disease is like kind of the opposite and assumes that we don't have Jones paradox. So if we do actually see a reduction in the cost of something, let's say software, then we would see a reduction in consumption to that and a reallocation of those resources toward the less productive sectors. So they're kind of converses of the same phenomenon. I think. Yeah, I think there is some, there is some like Conceptual similarity between those two ideas.

[Sponsor/Ad Voice]

Hmm, interesting.

[Paula Pant]

Going back to the Jobs Friday report. So I'm just going to pull up. Last night I was looking through three reports. By the way, at the time that you and I are talking, the jobs Friday report has been out for about 30 minutes.

[Dr. Ben Zweig]

Yeah, out of the press.

[Paula Pant]

So last night before the jobs Friday report came out, I was looking at three. Three. I was looking at ADP, Challenger, Gray and Jolts. ADP seemed rather promising, like 62,000, 63,000 new jobs. That's the best monthly gain since November 2025. Centered in construction, which added 19,000 and then education and health services combined, 58,000. Of course, you know, this is private sector only, but still that seemed for the audience. How do we square a month in which ADP is telling us a very positive story, but the BLS is telling us a very negative story?

[Dr. Ben Zweig]

Bloomberg has this index of alternative labor market data sources that team. The one who compiles this was actually the team that convinced Revelio to put out our own kind of private sector data release because they know there's a gap, especially with government shutdowns and all that. And they knew there was this gap in employment data. So ADP has been putting out employment data for a while. I think they have been less correlated with the BLS and there's some signal there. So they tell a positive story. The Challenger report, you know, Challenger Grand Christmas, that just tracks layoffs, they saw declines in layoffs. We saw that too at Revelia from public layoff announcements. So those actually did decline. But those are really announcements more forward looking. So maybe that has, you know, positive implications for what we may see in March. So those are a little bit more of a forward looking indicator rather than like a nowcast. Jolts is always kind of backward looking, but even indeed and other sources of job postings showed a bit of a positive story. So in Bloomberg's consensus view, you know, they smush all these factors together and they estimated an increase of plus 55,000 jobs. And Revelia was a little bit of an outlier in that before BLS came out at negative 16. But now the BLS is even a further negative outlier. So I think, you know, in terms of the sources that provide headline employment numbers, it's really ADP, Revelio and BLS between the three, you know, ADP has plus 63, we have negative 16, BLS has negative 92. If you just average those together, it's close to flat. Maybe negative 20, negative 30, something like that. I think averaging them Together is probably almost as good as you're going to get. That's like close to optimal because they all come from different sources. You know, ADP comes from private sector payroll. Revelio comes from online Internet activity, from job seekers and employers. And BLS comes from surveys. So totally idiosyncratic. And I think they all have sources of error, but when you average them together, you get a really good cohesive story about basic flatness, you know, slight weakening in the labor market. I think that's the best read that someone can get to.

[Paula Pant]

Right. On this show. We've talked for the past year about ADP's methodology and the BLS methodology. What is Revelia's methodology in terms of how you gather your jobs data?

[Dr. Ben Zweig]

So we have a few different releases. So we have headline employment changes, which really come from profiles. And I'll circle back to that. We have one which tracks layoffs, and we have another which tracks job posting volume and salary changes. And the Jolts alternative, where we track hiring rates and attrition rates, also come from profiles. So basically what we see is the extent to which people are leaving positions and joining new positions. So we have, you know, from places like LinkedIn, Jobcase, you know, a whole bunch of other online resumes. You know, these are places where individual people say when they are joining and leaving jobs. Of course, that's just a sample, but a very big sample. You know, it's over 100 million people in the US and there's some lags in reporting, which is very tricky, but possible to correct for. And through that, there's enough of a signal of, you know, whether there are more people leaving the labor market or joining the labor market that we can derive an estimate of the growth in employment. And that can also be validated month after month. So there are some revisions, but the revisions tend to be a lot smaller than the revisions we see from bls. Just because the sample's so large.

[Paula Pant]

Right. BLS revises their data twice. So they'll do the monthly revision, they'll do another revision after two months and then. Well, actually, I guess three times because then they do at the end of the year, that big annual revision as well.

[Sponsor/Ad Voice]

Yeah.

[Paula Pant]

Does Revelio have a similar system with multiple revisions?

[Dr. Ben Zweig]

Yeah, we actually just revise more continuously. So rather than have these kind of discrete cutoffs, you know, we'll revise after one month, two months, three months, and to infinity. But after two months, the revisions are so minimal. But we do revise because there are restatements in when people say when they left the position. You know, some, some people leave a position and some of them update right away, but some of them update after three months or a year. So there is kind of this long tail of restatements just to the extent that individuals say, oh yeah, I left my job back in May.

[Paula Pant]

Any major things that struck you when you saw the Jobs Friday report? Were there any aspects of it that surprised you?

[Dr. Ben Zweig]

Yeah, I would say if we break down the growth into hiring and attrition, one note is that attrition has kind. You know, those are both very low. You know, we're in a low hire, low fire environment. Attrition rates have stabilized at a low level. Hiring rates are ticking lower. So I think to the extent that we can disentangle whether this is driven more by whether this decline is driven more by outflows from firms or a lack of inflows, it's really a lack of inflows. So we are seeing declines in hiring less about separations and layoffs. So that's something that is worth keeping in mind as we think about like labor market dynamism generally. Postings keep falling. And then the other thing that is noticeable is that in the last year we've seen pretty steady increases in pay. And this was really the first month where we saw a decrease. So as we're thinking about what's really going on, this increase in pay and decrease in quantity really led us to think that these weak employment numbers were really supply driven, that we're just constrained, the labor market's constrained. There's so many policies around restricting immigration and things like that that do meaningfully affect the supply of labor. And meanwhile, unemployment rates have stayed low. The fact that we're seeing declines in pay as well make me think that we are starting to shift a little bit more toward a demand driven weakness, which is a little bit more worrisome from a macro health perspective. So something we, we gotta keep tracking. But something that kind of caught my eye as I was looking at these numbers.

[Paula Pant]

Can you elaborate on a demand driven weakness rather than that supply driven weakness?

[Dr. Ben Zweig]

Yeah. So, you know, if we see decreases in quantity of people supplied, you know, driven by supply, it's really because there are fewer people in the labor market. And if we see fewer workers available, fewer people entering the labor market, fewer migrants into the country, you know, that decreases supply. But demand is really, is really more of a recession indicator. You know, maybe firms are just not hiring because there is suppressed economic activity. They're not projecting healthy sales numbers. You know, they're Sort of gearing up for weaknesses in their own industrial production. So that would be more of a signal of true or, you know, market full market weakness.

[Paula Pant]

Yeah, yeah. Of weaker forecasts.

[Dr. Ben Zweig]

Yeah, yeah, exactly.

[Paula Pant]

With supply driven weakness. Because sometimes that can come from decreased labor force participation. And that decreased labor force participation can sometimes be people giving up. You know, people being unemployed for so long that they have just given up the search. So they are at that point long term unemployed, but technically no longer counted in those unemployment numbers. So I feel like there's almost this bifurcation with supply driven weakness where it can be a reduced population size or it could also be a disheartened population.

[Dr. Ben Zweig]

Totally. I think that is likely a bigger part of the story. You know, these kind of discouraged workers because they're not counted in the unemployed. And unemployment rates are still pretty healthy, and I think probably deceptively healthy because we do have less employment, more clear weaknesses, and yet the unemployment rate hasn't really budged.

[Paula Pant]

Right.

[Dr. Ben Zweig]

Which should make us think that there are people who are kind of not even trying, maybe waiting and seeing, maybe retiring early. There's all sorts of dynamics that can lead someone to not want to participate in the workforce, in the labor force.

[Paula Pant]

Well, I've kept you long enough. Thank you for taking the time to chat with us. Dr. Ben Sweig is the CEO of Revelio Labs and the author of Job Architecture. I can see several copies behind you.

[Dr. Ben Zweig]

Oh, yeah, Nice. Thanks for having me. Yeah, always a pleasure.

[Paula Pant]

Excellent. Thank you. That's our show for today. Thank you so much for tuning in. Thank you for being an afforder. If you enjoyed today's episode, please share this with the people in your life. Friends, family, neighbors, colleagues. That is the single most important thing that you can do to spread the message of FI R E. Sign up for our newsletter. It's totally free and worth every penny. Afford anything.com Newsletter by the way, I got that joke from Joseph Sehi, so credit to him for that one. Share this with your friends and family and open your favorite podcast playing app. Please leave us up to a five star review. Thank you so much for being part of this community. I'm Pahla Pant. This is the Afford Anything podcast and I'll meet you in the next episode.