Lots More on the Worsening State of the US Labor Market

Summary

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Odd Lots Podcast Summary

Episode: Lots More on the Worsening State of the US Labor Market
Date: November 7, 2025
Hosts: Joe Weisenthal & Tracy Alloway (Bloomberg)
Guest: Conor Sen (Bloomberg Opinion Columnist)

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Episode Overview

This special edition of Odd Lots, marking the show’s 10th anniversary, dives deep into the current turbulence in the US labor market. With official job data unavailable due to a government shutdown, hosts Joe Weisenthal and Tracy Alloway, joined by Conor Sen, unpack alternative labor indicators, conflicting economic signals, the role of AI, the impact of immigration, and emerging structural challenges facing US employment. This candid discussion weaves together data skepticism, macroeconomic theory, and on-the-ground anecdotes to make sense of an opaque and possibly deteriorating jobs outlook.

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Key Discussion Points & Insights

1. Celebrating Ten Years of Odd Lots (01:54 – 02:53)

• Milestone banter; the hosts acknowledge their 10th anniversary.
• Tracy jokes about never receiving a gift from Joe, who counters he brings back sweets from travel.
• Memorable, lighthearted moment:
  Tracy: "I wait with bated breath for a gift from Joe one of these days." (02:32)

2. Government Shutdown & Lack of Official Jobs Data (03:31 – 05:13)

• Due to the government shutdown, official Non-Farm Payroll (NFP) report is missing.
• Discussion of turning to alternative datasets like ADP and Challenger.
• General frustration with alt-data’s accuracy and lack of emotional “punch.”
  • Joe: "It just doesn't hit the same, does it, Connor?" (03:54)
  • Conor: "Having to care about ADP is just the worst." (03:59)
• ADP’s flaws: revises towards BLS numbers, so not truly predictive in real time.

3. Conflicting Alternative Labor Indicators (05:27 – 08:12)

• Challenger data: “worst month for layoffs in 20 years” (headline), but initial jobless claims stay steady.
• ADP estimates show a modest 42,000 job gain for October, versus Challenger's bleak picture.
• Conor clarifies Challenger reports “announced” layoffs, not actual job losses—possible headline inflation.
  • Conor: "The way the Challenger data works is it's announced layoffs... not actual job cuts that month." (07:16)
• Initial claims low, but last year's hurricane effects distort year-over-year figures.

4. "Contracted Market" vs "Spot Market" in Employment (08:58 – 11:09)

• Conor introduces helpful analogy, drawing from commodity markets:
  • "Contracted" market: jobs and salaries locked in during 2022 boom (e.g., high pay for analysts who stay put).
  • "Spot" market: current hiring for similar roles commands much less.
  • Joe: "The person sitting in that seat might be taking in $150,000... but if that seat were open ... maybe it would only be ... $100,000." (09:35)
  • This tension, as “seniors” stay put, squeezes out new entrants—hurting upward mobility.

5. The Role of Immigration and Demographics (11:09 – 11:53)

• Lower immigration leads to a lower 'break-even' jobs rate.
• Diminished population and job growth = less demand in areas like apartments and consumer staples.
  • Conor: “If you don't have population growth, you don't need job growth, and if you don't have job growth, you don't need to sign an apartment lease.” (11:34)

6. AI: Cause or Context for Job Cuts? (11:53 – 12:25)

• AI as a justification for layoffs versus real tech displacement.
  • Conor: “I don't think the technology is displacing workers... but companies are cost constrained and feel like they have to invest in AI, so you've got to cut somewhere.” (12:02)
  • AI as a boardroom “optics” move—firms want to appear tech-forward by cutting labor.

7. Consumer Weakness Moves Up the Income Curve (13:56 – 15:44)

• Chipotle, McDonald's, Sweetgreen, and Cava suffering; fast-food and salad-bowl chains see flagging demand.
• McDonald’s aggressively returned to “value” with its $5 meal, vying for market share amid price-sensitive consumers.
  • Tracy: “It is not nothing to get a meal from McDonald's nowadays.” (14:04)
  • Conor: "When you're hearing Chipotle talk about weakness among 25 to 35 year olds... weakness is creeping up the income scale..." (15:44)

8. Yawning Data Gaps & Outlook for Official Employment Reports (18:24 – 19:03)

• Even when government reopens, September-October job data will be “messy” and not insightful.
  • Conor: "We're not going to have a clean read... until at least January... we're kind of just twiddling our thumbs until year end." (18:49)

9. The Fed’s Conundrum: Policy in an Uncertain and AI-Augmented Labor Market (19:03 – 21:13)

• Fed unlikely to change course until “hand is forced.”
  • Labor market for long-term unemployed is weak; unemployment rate lagging reality.
  • Rate cuts haven't alleviated housing market or job growth.
    • Conor: “The Fed's cut rates 150 basis points and housing is worse now... the labor market doesn't seem to be getting better yet.” (19:50)
• Fed doesn't control, or maybe even understand, the transmission of AI shocks; it's a blind spot.

10. Projecting AI Politics: 2028 and Beyond (21:13 – 22:27)

• Anticipation that AI will become a divisive, high-stakes political issue.
  • Joe: "It seems very plausible to me that in 2028... most people see [AI] as a job killer / electricity price booster." (21:43)
• Split in Republican coalition between tech-oriented and working-class interests.

11. How Close Are We to a Job Market "Snowball"? (22:39 – 23:49)

• Companies likely to be cautious with hiring and investment plans for 2026.
  • Weak Q4 investment plans could foreshadow joblessness in Q1 2026.
    • Conor: “Could the unemployment rate go into the high fours? Yes... three to six months from now it's still going to be worse than it is today.” (23:20)

12. Hidden Risks: Private Credit and Underwriting Weakness (23:49 – 24:43)

• Private asset markets may have taken on greater risk than recognized.
• Echoes of opaque underwriting from fintech and private credit firms; could be in trouble if downturn accelerates.
  • Conor: "It's just hard to think underwriting is really, really great right now... If anything worsens, I assume those guys are going to be in trouble." (24:03)

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Notable Quotes & Memorable Moments

• Joe Weisenthal:
  "It just doesn't hit the same, does it, Connor?" (03:54)

• Conor Sen:
  "Having to care about ADP is just the worst." (03:59)
  "The way the Challenger data works is it's announced layoffs... not actual job cuts that month." (07:16)
  “I don't think jobs are really growing in the aggregate right now. Certainly ex-healthcare.” (08:17)
  "I don't think the technology is displacing workers... but companies are cost constrained and feel like they have to invest in AI." (12:02)
  “If you don't have population growth, you don't need job growth, and if you don't have job growth, you don't need to sign an apartment lease.” (11:34)
  "We're not going to have a clean read on the data until at least January... we're kind of just twiddling our thumbs until year end." (18:49)
  "The Fed's cut rates 150 basis points and housing is worse now than it was a year and a half ago." (19:50)

• Tracy Alloway:
  "It is not nothing to get a meal from McDonald's nowadays." (14:04)

• Joe Weisenthal:
  "It seems very plausible to me that in 2028... most people see [AI] as a job killer / electricity price booster." (21:43)

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Important Timestamps

• 01:54 – Odd Lots 10-year anniversary banter
• 03:31 – Start of labor market discussion (shutdown and NFP absence)
• 05:27 – Unpacking alt-data (Challenger, ADP, initial claims)
• 08:58 – Contracted vs spot labor market analogy
• 11:09 – Impact of immigration on jobs, demand
• 11:53 – AI as a driver or scapegoat for cost-cutting
• 13:56 – Food sector as a proxy for consumer pressure
• 18:24 – What's next for labor data reliability
• 19:03 – The Fed, interest rates and macro strategy
• 21:13 – The politics of AI; what to expect in 2028
• 22:39 – Jobs snowball, Q4 planning outlook
• 23:49 – Hidden risks in private credit markets

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Tone and Style

The episode maintains Odd Lots' signature blend of analytical rigor and wry, self-aware banter. The discussion is candid, skeptical of data (and hype), and peppered with memorable analogies to commodity markets and university life. All participants speak openly about uncertainty and the limits of existing policy tools, with humor occasionally leavening the heavy subject matter.

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This episode provides a thorough, nuanced, and at times uneasy view of the US labor market's state—and how data gaps, economic headwinds, and hype cycles may be obscuring deeper structural shifts.

Transcript

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[Tracy Alloway]

It's our 10 year anniversary. Because everyone keeps sending us messages.

[Joe Weisenthal]

I know. We only knew. I didn't realize that today was the actual 10 year anniversary until I started getting emails from random people this morning. It was like oh, happy 10 years.

[Conor Sen]

Like what?

[Tracy Alloway]

Random Bloomberg people too.

[Conor Sen]

I thought I would be the first to remember.

[Joe Weisenthal]

Oh yeah, sorry dad.

[Tracy Alloway]

In our hearts, you were the first dad. Yes.

[Conor Sen]

Ten years ago today, the first episode of Odd Luck I do have. I forget who sent this to me. I have a mug.

[Joe Weisenthal]

Yeah. So. Happy anniversary to us.

[Tracy Alloway]

Happy Birthday.

[Joe Weisenthal]

Happy Birthday.

[Tracy Alloway]

What did you get me?

[Joe Weisenthal]

I guess it's a little weird. Happy anniversary to us. Happy Birthday to Odd Lots. And you know what? I didn't get you anything.

[Tracy Alloway]

I know you didn't. I wait. I wait with bated breath for a gift from Joe one of these days.

[Joe Weisenthal]

You know what? No, that's not true. I've gotten your gift.

[Tracy Alloway]

Name one.

[Joe Weisenthal]

I Always bring back sweets when I travel.

[Tracy Alloway]

Everyone does that.

[Joe Weisenthal]

I know. I guess that doesn't count. You're right. You know what would be a really wonderful gift?

[Hiscox Insurance Representative]

What?

[Joe Weisenthal]

Fresh jobs data.

[Tracy Alloway]

Oh, yes.

[Joe Weisenthal]

I did a dead list.

[Tracy Alloway]

I am both the most popular trader and most successful trader at Citadel.

[Joe Weisenthal]

Feda's going viral.

[Tracy Alloway]

Barges.

[Joe Weisenthal]

This is an After School special.

[Tracy Alloway]

Except I've decided I'm gonna base my entire personality going forward on campaigning for a strategic pork reserve in the US Black gold. These are the important questions. Is it robots taking over the world?

[Joe Weisenthal]

No. I think that, like, in a couple years, the AI will do a really good job of making the odd lots pod. One day, that person will have the mandate of heaven.

[Tracy Alloway]

How do I get more popular and successful?

[Joe Weisenthal]

We do have the perfect guest.

[Tracy Alloway]

You're listening to Lots more where we catch up with friends about what's going on right now.

[Joe Weisenthal]

Because even when the odd lots is over, there's always lots more.

[Tracy Alloway]

And we really do have the perfect guest. I don't know about you guys, but I did not expect to miss the NFP as much as I am at the moment. I just thought, you know, we have all the alt data. Things will be fine.

[Joe Weisenthal]

It doesn't hit the same, does it, Connor?

[Conor Sen]

It doesn't.

[Joe Weisenthal]

Adp.

[Conor Sen]

Like, having to care about ADP is just the worst.

[Joe Weisenthal]

You're like. All these estimates or whatever, it's like it just doesn't. Even if you know it's coming out, it doesn't hit the same. There's nothing like the Chicago Fed estimate of unemployment.

[Conor Sen]

Like, all right, Austan Goolsbee, I love you, but not the same.

[Joe Weisenthal]

Well, wait, we gotta get him on here.

[Tracy Alloway]

Okay, so the one upside of not having the official data, the official jobs data, because of the government shutdown is everyone gets to be really mean about the alt data, right? And say, like, really harsh things about why they don't like adp. But could someone just remind me why we hate adp?

[Joe Weisenthal]

Oh, yeah. What's wrong with it, Connor?

[Conor Sen]

I mean, it's always. They revise it to the BLS data. So it's like, here's our estimate. And then six months later, you revise it. So then the historical data looks fine, but in the moment, it's actually not the same at all.

[Joe Weisenthal]

It's interesting because, you know, people always say, like, adp. Oh, it missed again. But it is a little weird. And it gets to, I think, some philosophical things, which aren't necessarily worth diving into for a conversation, but about what does it even mean to be right or Wrong. I mean NFP gets revised all the time. NFP is just a model for the real economy. You know, little confusing the map and the territory stuff. Anyway, when people are listening to this, it should have been jobs day. And so I don't really think there's going to be a report unless somehow the government gets hope. I don't think that's happening.

[Tracy Alloway]

This is our gift to Odd Lots listeners. Yes, in celebration of our 10 year anniversary, we are bringing you this labor market episode of Lots More brought to you by Odd Lots. And it's a poor substitute perhaps, but it's the best that we can do.

[Joe Weisenthal]

So this morning there was a headline challenger which has never been a particularly like top shelf data point for me. Like they said, the worst month for layoffs in 20 years. On the other hand, initial claims have been steady. Also there was a headline from Cleveland Fed's hammock. She's more concerned about inflation than employment right now. In terms of risk to the dual mandate, Conor, you've sort of pretty taking the opposite view. You think the labor market situation is pretty serious and urgent, maybe underappreciated as a risk you probably disagree with.

[Conor Sen]

We've had this low hires, low fires labor market for at least 18 to 24 months now. And I think we have evidence over the past few months that at least there's no reason for low fires to still be happening in corporate America. They don't have to hoard labor because if nothing else, if you really want to hire, there's plenty of young people, there's plenty of long term unemployed people to hire. Unemployment rates kind of low, but there's plenty of slack out there to hire people. So to the extent that Amazon has shown the way of we don't need to hold on to our Covid workers anymore, that could give permission to other companies to do the same. And at a time when everybody's trying to cut costs, that could snowball a little bit.

[Tracy Alloway]

So just going back to the ADP data for a second. So sorry, I hate to do this but according to adp, payrolls were up.

[Joe Weisenthal]

We're going to get a call from adp. No, I'm sure they're going to want to come on and defend, which is fine.

[Tracy Alloway]

Well I'm trying to get to some of the tension here, but okay, jobs up 42,000 for October and then we get the challenger data for that same month. And as Joe said, it's like the worst job cuts in 20 years. I think over 150,000 cut. Why does it seem like we are getting these two very different streams of jobs data at the moment where we do have some alternative data points that are coming in better than expected and then we have some that are just coming in that look almost, I don't want to say depression level, but like certainly worse than it feels at the moment.

[Conor Sen]

Well, the way the Challenger data works is it's announced layoffs. So that could be anything from UPS saying we've laid off 50,000 people over the past 12 months or announced job cuts that haven't happened yet. So they're just headlines, not actual job cuts that month.

[Tracy Alloway]

Oh, I see. Okay. So it's aggregating, just people saying stuff. And we're still not entirely sure whether.

[Conor Sen]

Or not they're going to headline aggregation, not confirmed layoffs that month.

[Joe Weisenthal]

What do we know about initial claims?

[Conor Sen]

So the initial claims are still pretty low. I think one thing we're dealing with right now is that the year over year is incorporating the Hurricane Helene situation from last year. So if you remember that was end of September. Then you saw claims in North Carolina and Florida and the Southeast as people were. There was flooding and so companies were closed for a while. So you saw a spike in claims in October. So we're kind of lapping that period. And so to the extent that the year over years don't look bad right now, that could be partially a hurricane impact.

[Tracy Alloway]

Do you have like a shadow NFP figure in your mind that you're working on?

[Conor Sen]

For me, it's just sort of. I don't think jobs are really growing in the aggregate right now. Certainly ex healthcare. And so to the extent that we think corporate earnings are going to grow 10% over the next 12 months, how do you grow earnings 10% if there's no job growth? It just seems like you'd need a real productivity miracle or some sort of compositional dynamic to get there.

[Joe Weisenthal]

If the labor market is substantially weakening, we are going to revisit the cyclical versus structural debate. Except this time the structural argument would be that it has something to do with AI. And if the call if AI is driving job loss, which I'm not really convinced by, but if AI is driving job loss, then rate cuts aren't going to do much like what is.

[Conor Sen]

Can I give you my conundrum of what I think's going on? I think about Craig Fuller and Freight Commodity Markets and all the supply chain episodes you guys did. And I think about there's sort of the contracted rate of like promotions and jobs that people got in 2022 home prices people committed to in 2022. And then like the spot market, which is long term unemployed young people, resale housing, inventory. And I feel like the spot market wants to get back to 2019 affordability and then the contracted market wants to stay at 2022 prices. And there's this really growing tension between the two as, as the spot market's trying to drag down the contracted market, so to speak.

[Joe Weisenthal]

So to understand this to maybe the way is that there is a seat, that a company has a role and the person sitting in that seat might be taking in $150,000 currently. But if that seat were open and they had to hire for it, maybe it would only be they could hire for that role for 100,000 or 90,000 or 110,000. And thus the gap between contract and spot.

[Conor Sen]

Right. And I think, you know, it's, you think about like a bank analyst program where you hire a bunch of 21 year olds. Maybe they were making $100,000 in 2020 and then that got raised to 150 in 2022 because the job market was so strong. Those analysts then become associates and then there's kind of an expectation they're going to leave for business school or private equity or whatever, but because the labor market's so bad, they don't want to leave. And they might be perfectly fine people. But at some point you're like, well, we need to kind of kick you out to make room for the next 21 year olds. Almost like if a college like University of Texas, if the seniors were like, we're not leaving because the job market's weak, we're just going to stay. And at some point Texas is like, well, we have freshmen that need beds. You have to leave. And I worry we're kind of getting there.

[Joe Weisenthal]

That's a great analogy.

[Tracy Alloway]

There's a whole movie about Ryan Reynolds trying to stay at university because of a lackluster job market, I presume. Anyway, the other thing that everyone seems to be debating at the moment is the impact of immigration or lack thereof on the total labor market and what that means for supply. And depending on where you come out on this particular debate, you might have very different impressions of what's going on at the moment. What side of it are you sort of landing on?

[Conor Sen]

I think it's fair to say that the break even jobs rate is much lower. Like maybe it's 30,000, but also supply kind of generates demand as well. And I think you can look at housing to show that. I don't know if he'll appreciate me calling him out. But Lee Everett, who you've had on to talk about multifamily a couple times, I asked him, do you think that reduced immigration is hurting multifamily performance? Because Q3 was pretty soft for apartments. And his view is it's not like undocumented migrants are living in class A and Class B apartments, but if you don't have population growth, you don't need job growth, and if you don't have job growth, you don't need to sign an apartment lease. So it might not be directly leading to weakness and whatever, but it's sort of that demand weakness is showing up elsewhere in housing, in consumer staples, things like that.

[Joe Weisenthal]

Let's get back to the AI question. Do you think it's playing some role in cuts? Because. Yeah, I'll leave it at that.

[Conor Sen]

I think in two ways. Yes. I don't think it's the technology is displacing workers, but I think that companies are first cost constrained and they feel like they have to invest in AI. So if you have to increase your budget somewhere, you've got to cut it somewhere else. And labor is a good way to do that. And then I just think the vibes in general of, well, if you're hiring a bunch of people, you're probably a loser that doesn't get AI and so you can't look like a loser, so you're just not doing it.

[Tracy Alloway]

Yeah, this is what I worry about with the optics, which is if there are a bunch of companies recently who have seen their share prices go down, and we're recording this at lunchtime, so all the food ones are on my mind. But for instance, McDonald's, Chipotle.

[Joe Weisenthal]

Right.

[Tracy Alloway]

Came out with disappointing earnings and shares are going down. If you're a company watching your stock price go down, you're thinking about the levers you can pull to make it go up in the future, price increases probably aren't going to work when everyone's already complaining that, you know, a cheeseburger and fries over at McDonald's are like more than $10 now. But one thing you can do is say, well, we're going to cut workers. And by cutting workers, look at us, we really understand AI and we're in on like the current trend or craze.

[Conor Sen]

Something McDonald's did 18 months ago is they finally, when everything was slumping in 23 and 24, their comp sales in the US went negative and they had this big earnings call saying, we've always prided ourself on value, our value gap versus our peers has really compressed. But we are going to win at value whatever it takes. Almost like a dragging moment for fast food. And they introduced this $5 value meal. They call it Make Value, their new program that they launched earlier this year. And they've really clawed that value gap back. And so it's sort of like they're going to claim their market share and then everybody else is going to lose traffic to McDonald's. And so I think they're kind of fine, but everybody and then kind of gets to that contracted versus spot economy framework where McDonald's got back to where they need to be, everybody else isn't there, and they're all trying to figure out how do we deal with this environment where demand is weak and consumers are very price pressured.

[Tracy Alloway]

I want to say, Joe, I have yet to experience the rebound of value at McDonald's. I had a moment of weakness on Monday and I did.

[Joe Weisenthal]

And it was costly.

[Tracy Alloway]

It was costly. I went through the drive thru. I didn't use the app, so that was probably the problem. But, like, it is not nothing to get a meal from McDonald's nowadays.

[Joe Weisenthal]

My favorite thing is whenever, like a sector comes up, I start like pulling up stock charts on the terminal. Sweetgreen, that was a $45 stock last November. This is maybe the biggest Trump era loser. It was $44. Now it's a $6 stock. Cava was a $150 stock also in late 2024. Now it's a $47 stock. I mean, these are like, you know, these are the tip of the sphere. The most cutting edge slop bowls you can get and they're.

[Conor Sen]

Yeah. I feel like if you were the kind of person working for like, Jigar Shah's group and like eating lunch in D.C. the kinds of things you're e in a bad recession now, those types of workers.

[Joe Weisenthal]

I do, Yeah. I mean, that's not funny. It's true. I also, Tracy, I love our D.C. listeners, so I don't want to insult people in D.C. but when I think of like, what is the city, which I'm certain has the highest percentage of people that sort of eat a bowl lunch, I always think in terms of the workforce, it must be D.C. and.

[Conor Sen]

I do think, I think it was actually founded in D.C. and Sweetgreen.

[Joe Weisenthal]

Both Kava and Sweetgreen are like, this is true innovation serving the local market. And so I do think it's interesting that Stisi is an industrial hotbed for these kind of lunches.

[Tracy Alloway]

I'll just say I see a lot of sad salad eaters here in New York, including me, including Joe. But I am willing to say that Kava and Sweetgreen are certainly that sort of, I guess liberal bureaucratic government official coded your meal.

[Conor Sen]

Yeah.

[Joe Weisenthal]

Your rations.

[Tracy Alloway]

They are. Yeah they are. Here's your bowl of salad. Oh man.

[Conor Sen]

When you're hearing like Chipotle talked about weakness among 25 to 35 year olds, not just 20 to 24 year olds. So it does seem like that weakness is kind of creeping up the income scale, the age ladder. And maybe the Amex consumer is still fine, but it just seems like the weakness is moving up the income curve.

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[Tracy Alloway]

We were actually talking about the labor market and I know this is related but one, one thing that kind of worries me at the moment is that even if the government opens up tomorrow and NFP gets released soon after that, it feels like it's just going to be messy and even if we get the official number it's not actually going to be that insightful and we're still going to be spending all our time having the debates that we're having right now.

[Conor Sen]

I think we're not going to have a clean read on the data until at least January just because October is going to be a mess. Who knows when we're going to get the data then even if the government reopens then you have the November data is impacted by the shutdown which won't so yeah, we're kind of just twiddling our thumbs until year end.

[Joe Weisenthal]

So let's talk about, let's put it in the stakes for the Fed. If you were the Fed chair, which you probably play fantasy Fed chair in.

[Tracy Alloway]

Your mind there's a non zero chance that Conor could one day be governor.

[Joe Weisenthal]

Yeah. Or certainly a governor. Is there an effective move here? Is it keep cutting rates and how effective would they be? Play it out from the Fed framework.

[Conor Sen]

What I think they're thinking is that we keep missing on inflation. We don't know if tariffs are going to lead to unanchored inflation expectations even though they don't take the stock market into account. I do think on some vibes level if the stock market's high that doesn't force their hand and they're really anchoring to the unemployment rate is historically low which kind of. But again if you look at the long term unemployment numbers, age 2024 kind of that spot labor market groups that's actually quite weak. That's more of like a 2015 type labor market and I just think they don't want to do anything until their hand is forced. But again for me I see housing getting worse. The Fed's cut rates 150 basis points and housing is worse now than it was a year and a half ago. So I think the whole when the Fed cuts rates, housing is going to be fixed has not proven to be true and the labor market doesn't seem to be getting better yet. So outside of AI, it's just hard to see any upward momentum heading into 2026.

[Tracy Alloway]

If you were at the Fed dealing with an AI economy versus the economy of 10 years ago, let alone 30 or 40 years ago, but let's say 10 years ago. Does that make you think about monetary policy and the transmission mechanism different at all? Joe kind of got at this earlier.

[Conor Sen]

But, yeah, I think we all lived through the mid-2000s and then the bust and the bailouts, and it's like, should the Fed have prevented OpenAI from making these commitments? Should the Fed have prevented Nvidia from doing vendor finance on the scale they have? Maybe we'll say, in hindsight, yes, but in the moment, which is right now, come on, that's not going to happen. So I'm a little more sympathetic now to the Fed being blind to certain things in the boom, especially when it's outside of their mandate. Just because.

[Hiscox Insurance Representative]

Right.

[Tracy Alloway]

They're not AI regulators.

[Conor Sen]

No, exactly. And it's also with. With Trump, it's not like they're going to be telling Sam Altman he can't do what he's doing. So I feel like they're going to probably have a role in the cleanup, but in the moment, there's not a whole lot they can do.

[Joe Weisenthal]

It's funny that we're already, like, projecting it so far forward, but it is. I mean, this is. And I really want to do more on this. I think the politics of AI are going to be huge in 2028. And I expect. I don't know, it's very possible to me that the AI industry at the same time is a very big deal in the US and sort of friendless in DC it seems very plausible, seems very plausible to me that in 2028, the story is most people. Again, 2028, it's a lifetime from now in both politics and technology. But it could be a story where it's like, here's this thing. It's really important. There's tons of investment in it, but people, for the most part, either mostly see it as a job killer slash an electricity price booster. And there are some, you know, the stakes are gonna be very high. And I expect sort of like, especially on the Republican primary, I would expect. I would expect the Democrats to sort of be more comfortable. Their antagonism towards Big Tech has obviously been, you know, several years. I think it's gonna be some interesting divisions on the GOP side in terms of which lanes. And I think there is gonna be an AI lane or an anti. A line AI lane. You already see Ron DeSantis. He's been tweeting a lot about this. I think that's very telling.

[Conor Sen]

Well, it's also in 2024, the, the MAGA coalition was kind of working class voters of all races and ethnicities and then tech and vc. And it's just hard to see how their interests are truly aligned on AI.

[Joe Weisenthal]

Let's talk a little bit more just about the job market right now. Like, you know, let's say we were getting data, like do you think, you know, some rule, like we're in sort of, it's sort of come down. But how close do you think we are to the snowball? Like how urgent, how far behind do you think the Fed could get here?

[Conor Sen]

I remember when Liberation Day happened and people were wondering how bad it was going to get. And my thought was that companies don't like to change their capex plans in April and May. They're going to try to get through the end of the year and then figure out 2026 and Q4. And as they're doing that right now, it's hard to think that they're going to feel like we need, outside of AI, we need to step up investment in hiring.

[Tracy Alloway]

We feel really good about 2026 when the government's shut down and share prices going up.

[Conor Sen]

And so I worry a bit that it's like we all freaked out in April and May and then it was kind of fine for six months and then now is when people are going to make their investment in spending plans for next year and those are going to come in lower than they did a year ago and we're going to start to see that show up in Q1. So I don't think it's a next week, next month thing, but could the unemployment rate go certainly into the high fours? Yes, and I think we probably will get there. Does it get beyond that? I don't know, but I just think three to six months from now it's still going to be worse than it is today.

[Joe Weisenthal]

How concerned are you about like just while we're here and have you some of the first brands, Tricolor, some of these dodgy credits, you know, Jamie Dimon.

[Tracy Alloway]

Cockroaches.

[Joe Weisenthal]

Cockroaches, right. Like, you know, what's your sense?

[Conor Sen]

I feel like the whole private asset thing is that it was small in 2008, so there weren't really any problems there. And then in the early 2010s you had ZIRP and then very cheap assets and they had a great decade of performance based on that. And then the asset class kind of just kept getting bigger just because I don't know if there's a real fundamental reason for it. It just became A thing that institutions do. And so it's like, are they really underwriting very well? You look at the stock prices of a firm and upwork or all these AI fintech lenders are getting destroyed and you've had. That's the treating guy talked about Blue Owl. It's just hard to think. Underwriting is really, really great right now. And so if anything worsens in the economy, I assume that those guys are going to be in trouble.

[Joe Weisenthal]

The Blue Owl thing is worth talking about more. And I think we have an episode coming up that will touch on that. You know what I should say? We've been speaking with Bloomberg opinion columnist.

[Tracy Alloway]

Connor Sen. Oh, yes, that's very important.

[Joe Weisenthal]

I wanted to make sure I knew there was one more thing I wanted to get in the conversation and so I wanted to establish who the guest we are actually talking to was.

[Tracy Alloway]

I guess Connor sen. Person with non 0 chance of becoming Fed Chair.

[Joe Weisenthal]

Non 0 chance of becoming Fed chair.

[Tracy Alloway]

He said that? That's the real title.

[Joe Weisenthal]

That's the real title.

[Tracy Alloway]

We should leave it there. We should go. I kind of want McDonald's again, which is bad.

[Joe Weisenthal]

It's lunchtime. Lots More is produced by Carmen Rodriguez and Dashiell Bennett with help from Moses Andam and Cale Brooks.

[Tracy Alloway]

Our sound engineer is Blake Maples. Sage Bauman is the head of Bloomberg Podcasts.

[Joe Weisenthal]

Please rate, review and subscribe to odd lots and lots more on your favorite podcast platforms.

[Tracy Alloway]

And remember that Bloomberg subscribers can listen to all our podcasts ad free by connecting through Apple Podcasts. Thanks for listening.

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[Hiscox Insurance Representative]

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[Joe Weisenthal]

Hi.

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[CNN Five Things Host]

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[Joe Weisenthal]

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