Is the U.S. economy on a roll?
The September jobs report showed the American economy remains strong, with 119000 new jobs added, more than double expectations.
It's World Business Report from the BBC World Service.
This is Andrew Peach.
Economists were sceptical about Donald Trump's economic plan, so were they wrong?
We'll look at the numbers.
Also today, why novelists are worried AI could take their jobs and why the Taiwanese president is posting photos of himself eating sushi.
If you go on social media, you'll see Republicans in the US all over it, hailing...
The Trump effect after new data showed an unexpected pickup in hiring.
Employers, adding 119000 jobs in September, more than double what many had expected after a rather lacklustre summer.
Here's the White House press secretary, Caroline Levitt.
The September jobs report showed the American economy remains strong, with 119000 new jobs added, more than double expectations.
These gains came after the summer passage of President Trump's historic tax cuts and multiple big trade deals with countries around the world.
In particular, construction jobs surged by 19,000 in September, the largest monthly gain in a year.
Nearly all of this solid monthly job growth came from the private sector and went to Americans rather than foreign-born workers the opposite of what we saw under the previous administration.
Inflation also remains under control and wages are up by 38 over the year for American workers because of President Trump's pro-growth policies.
So, is the US economy doing well?
And if it is, what does that mean for the rest of the world?
My colleague Michelle Flurry is in New York.
I mean, I think if you take tariffs as an example, they haven't had as negative a drag on the economy as we had expected at the start of this year.
And I think some of the reason for that is that the effective tariff rates have kind of moved about quite a lot, as they've been negotiated in some cases away or at least lower.
And so it hasn't been as much of a drag.
As for the fears about the jobs market, people are still pouring over that data very closely.
And of course, we had September's jobs report showing that 119,000 jobs were added.
Now that is more than double what many people had forecast, which suggests things are sort of looking better than perhaps people had anticipated.
Not great.
It's not a sign of a roaring economy, but also not bad.
It doesn't sort of meet the standard of those who are kind of claiming doom and gloom either.
Do we know where those jobs have come from and how they've been created?
A lot of those jobs came from service sector and others.
There was less on the government side.
We saw some additions in construction, but it hasn't come from manufacturing.
And that is notable because, of course, one of the key things Donald Trump is trying to do through tariffs is to bring manufacturing, to reshore jobs, back to the United States.
So we're not seeing that happen at this point, if you look at kind of where the jobs are coming from.
It's soon maybe for that to be possible, I suppose. bit soon, exactly.
So a lot of Donald Trump's economy will play out next year.
But in terms of those who were pessimistic at the start of this year and thought we'd see a sharp slowdown in the second half, that hasn't happened, not to the degree that perhaps some were predicting.
And make this add up for me, how can we have 119,000 more jobs, but also unemployment going up?
What happens is you get people who are maybe sitting on the sidelines returning to the labor force and that can sort of or kind of not returning and that has an impact on the unemployment rate.
So that's why you see that difference between the jobs being added, but also the number of people who are now counting themselves as kind of looking for work and in terms of other indicators as to how the the us economy is doing.
What do they tell us?
Quite frankly, we're flying blind at the moment.
And the reason for that is that government shut down of 40 days.
A lot of data that we would expect to have at this point, things like inflation, which is the other key issue here right now.
It is the cost of living as it is in many parts of the world.
Is inflation going up?
It's certainly above the Federal Reserve's target of 2%.
But again, we haven't had any solid official data for a while now.
And on the jobs front, the one we're talking about is from September.
We're not going to get October's number, or at least only partial bit of October's number, with November's figures when they're published later in December.
Michelle Fleury in New York.
Now to my guests, Kerry Leahy, economist at Columbia University.
We've got the chief economist at the American Staffing Association, Noah Youssef with us.
And Jennifer Rodriguez is a bilingual school psychologist working with National Recruiting Consultant.
And Jennifer, how long did it take you when you needed to find a new job?
It took me about three to six months before I secured employment.
Give me the context of your situation.
I think you're moving.
So yes, I was in the process of relocating to a different city, over 200 miles where I was originally living from.
And during that time, I was seeking direct employment with school districts.
However, it was a little bit of a challenge not having connections to the city I was relocating to.
The hiring timeline was extremely long.
When I applied directly to school districts, it typically took about two months just to get from submitting my application to scheduling an interview.
However, when I connected directly to a recruiting agency, specifically the recruiter I'm currently working with, Miss Cool, they had direct connections.
And the turnaround time from the time I applied with them to getting an interview was much quicker.
I mean, you obviously got massive skills, really developed skills in your area.
But then I suppose there's some limit to the number of jobs there are requiring those skills.
Was it all much more difficult than you expected?
Yes, definitely.
When you're applying directly to a school district and not within an agency, like I mentioned, the timeline can take a little bit longer.
And so that was a bit of a challenge, especially knowing that I was relocating to a new city.
I was in a bit of time crunch to get employed.
I wanted to know that moving, I was going to have employment.
But working with an agency was much easier.
Is it your sense just from people around you?
Do you feel this idea that suddenly there are loads of jobs being created in the US economy?
Yes, most definitely.
In what kind of areas?
Within the local education agencies.
There are a lot of positions that I'm seeing as far as educators, school psychologists, speech pathologists, occupational therapists.
There's always definitely a need in those areas.
Jennifer, thank you so much for being with us.
I really appreciate your experience as part of this discussion.
We're going to turn to Noah Yosef now, Chief Economist at the American Staffing Association.
He used to work at the US Department of Labour and also the Department of the Treasury.
Thank you for being with us, Noah.
What do you make of the news today that employment is on the up, and more rapidly than anyone expected?
Well, Andrew, at face value, the numbers in September's jobs report do seem healthy.
One hundred nineteen thousand jobs added to the economy and a four point four percent unemployment rate.
But context does matter.
Over the last three months, from June to August. job growth averaged just 18,000.
So against that number, 119,000 seems really good.
But just one year ago, job growth topped 200,000.
So that makes 119,000 look a little bit more paltry.
And what that suggests is that the labor market is still slowing down in terms of job growth.
And we know this because job gains are becoming more concentrated.
Of that 119000 job number, 67 percent of those jobs came from just health care as well as food services.
And so what that means is that if you're not in the health care sector, or if you're not within food services, the opportunities that you have to successfully land a new job are becoming fewer and fewer.
And that is why we're seeing that, even though there's a substantial amount of jobs that are being gained within the economy, there's also an increasing rate of unemployment.
Okay.
I mean, as my colleague Michelle was saying in New York, really the Trump plan is to create jobs in manufacturing and they're not there yet.
Perhaps they'll never come, but if they do come, it certainly wouldn't have been by now.
Yeah, absolutely.
So I think it's important to remember that, in this particular economic climate, companies are looking for any reason not to add more headcount.
And the reason why is because they're seeing higher labor costs due to inflation as well as interest rates.
They're also seeing heightened economic uncertainty brought about in large part due to tariffs.
And then in addition, declining levels of consumer activity because of these macroeconomic forces.
And so what you're seeing is that job growth is becoming smaller and it's not able to accommodate All those people in the labor market who are currently seeking work.
That includes young graduates who just moved into the labor market as of this year.
Additionally, mid-career folks who are looking to change jobs.
In addition, with the advent of artificial intelligence and the promises that it can do the work of humans for a fraction of the cost, it is becoming much more challenging for your average individual to successfully land a new position.
We'll come back to AI a bit later in the programme.
Let's talk about the cost of living.
A year ago, that was the big concern of people in the US.
It's what Donald Trump promised to deal with.
He then introduced tariffs, as he said he would, and economists said well, that's just going to make the cost of living situation worse.
How is all that now?
Well, unfortunately, you have a confluence of multiple drivers of price growth.
For the past couple of years, we've seen inflation trend way above normal levels due to the recovery from the pandemic, as well as the substantial fiscal stimulus that was enacted.
But then tariffs have made the situation worse because obviously when businesses are forced to pay more amounts of money to import goods,
They end up transferring that over to consumers.
And so essentially, what we're seeing right now is that the prices people are paying for rent, for for groceries they are still much higher than they are used to.
And more importantly, it is growing at a faster pace than households are used to.
And because of those trends, that is why we're seeing some pullback in consumer activity.
What about for our listeners outside the US?
If the US economy is doing better than people thought it would, is that a cause for people in other countries to be celebrating?
Yes, absolutely.
30% of global gross domestic product comes from the United States.
60% of the United States' gross domestic product is based on consumption.
And the most surefire way to ensure that people are still spending their money within the economy is by making sure that they have access to a steady paycheck.
Therefore, the health of the labor market is not only important to outcomes of the United States economy, but also just as important to the global economy as well.
Noah, thank you very much indeed.
Live to Kerry Leahy now, economist at Columbia University in New York.
If the numbers on jobs are so much better than anyone thought Kerry, does that mean that economists were wrong when they basically said Donald Trump doesn't know what he's doing?
Well, I think they're overemphasizing the potential for a slowdown so far this year, which didn't come about.
I think where economists, and obviously I'm one of them, was talking about higher inflation.
You are getting a higher inflation profile than you would have thought of a year ago.
So I'd say on the growth side, we've been too pessimistic.
And in part, as your earlier speaker mentioned, the good number in the most recent month September, made up for three horrible months previously.
So the smoothing it out, the markets, the job growth's been very little over the last three months.
But that's a lot better than people like myself thought that by now you'd be in a recession due to a lot of the policies Trump was doing on tariffs and the like.
Can we see why that is?
Can we see why things have not gone quite the way that you guys predicted?
Well, I think you can put that in part, because at the point of maximum pessimism was when we thought the effective tariff rate was not the current 12 but more like 30.
And that kind of jumped, in some sense, freaked out the profession.
That's the first reason why. for it not happening.
The second is is that, with the exception of China, virtually no other country retaliated against the United States?
So we didn't get a one-two punch of the so-called moving quickly to the bottom, where I raise my tariffs, you raise your tariffs and we all raise our tariffs so fast that all we do is go downhill from there.
That has not happened.
So I think it was too much pessimism on the tariff side led to worries about tariffs are going to undercut growth, and they haven't, or at least haven't yet.
Why are stocks down today?
Is that just some kind of market correction after a bit of overexcitement with NVIDIA, this time yesterday?
Two things.
The first you nail on the head is that the markets have been going backwards and forth on.
Do we have a productivity miracle coming?
And they felt a little better about it yesterday and then had second thoughts today.
So it was really a payback for such a good.
And then finally, was also the fact that the sleeping giant in all this, what's the Fed going to do with the numbers it learned today?
Net-net, the market thought they were less likely to cut rates in December.
And generally, when the Fed is moving away from cutting rates, the market doesn't like it.
So it was another reason to sell.
Let's talk about the U.S. retail giant Walmart.
What have we learned about their revenues and their situation?
Well, they did two very good things for the marketplace.
So, on a day where the market was down pretty sharply, particularly in tech land, They were up 6 through the normal trading day, and that was for two reasons.
One, they reported good results for today, and then they had upbeat forecasts of the future.
And when you do those two things, saying that business is good A and then B, it's going to be even better three to six months down the road.
The market loved it and they all know that Walmart's the biggest single US retailer, so that really carried a lot of weight.
Okay.
So the market responds positively to that.
A bit like NVIDIA yesterday.
Do we have any more really big bellwether firms going to tell us how they're doing in the next few days?
Yes, you got some of the more competitors are going to be coming out with their own returns, but generally they come after the market closes, for obvious reasons.
But they, once again, you do have this on and off period.
So I think you do have a Big productivity gains coming, but you probably have a bubble because we're anticipating too much.
So it could be a day where Wall Street's companies they follow do well, but not well enough.
Kerry, thank you very much.
Kerry Lee, he is an economist at Columbia University in New York.
Live on World Business Report with Andrew Peach here on the BBC World Service.
Researchers from Cambridge University have found that around half of published novelists in Britain fear that artificial intelligence will entirely replace their work.
The lead researcher, Dr Clementine Collett, says it's a worrying trend because novels are vital to society's wellbeing.
This is based on research with nearly 400 literary creatives across the UK.
And the long and short of it is that novelists and those in publishing are really worried about generative AI and they are already feeling the negative effects.
So, as you said, just over 50 of novelists agree that it's likely that generative AI will displace their work entirely.
And 39, so almost 4 in 10 of novelists have also said that they've already feeling the negative impacts three kind of reasons why they're feeling the impact on their income.
The first is because of competition. with generated material online.
The second is sabotage.
They feel that AI bots are writing them kind of botched reviews or maybe publish it, you know, saying that online their books are there which are under their name, this kind of false material.
And thirdly, because of the way that it's changing our attention spans and how we consume.
The kind of rise of personalization has moved us away from the long form and towards the short form.
Chris Manby is a novelist and ghostwriter who took part in the study.
I asked Chris if she's concerned about AI.
Of course.
Yes, absolutely.
I mean, I tried to go into the groups for the study with an open heart, hoping that someone would tell me the reasons why AI is a great thing for novelists.
But I'm afraid I didn't come away with that feeling.
I think it's fairly obvious it's going to impact fiction.
Tell me about your work as a ghostwriter, because as well as writing novels, you do that.
And that's another... area of writing where AI is a threat?
Yes, definitely.
I think in a slightly different way.
I've had previous clients, ghostwriting clients, who've come to me with manuscripts that quite clearly that they've written quote unquote with AI and then want me to fix if that makes sense.
But they don't want to pay to have someone fix it.
They just want me to read it and tell them how it needs to be improved.
Whereas...
Obviously, previously, I would have been writing a manuscript.
So I think there will be some sort of loss of work in that sense.
But I also do think that ironically, things like memoir are perhaps safer from AI, because while AI can write a romanticie, perhaps it can't sort of write someone's life in the same way as the person who's lived it.
And the ghostwriter has an important part to play in that, I think by helping a subject to tell their story differently, in a voice that's authentic to them.
Of course, yes, and it's like a duty of care almost of the subject of the book.
I've been participating in a book recently that's being written by a ghostwriter and I've very much got that from my conversations with the writer.
Not only is he trying to tell the story but thinking about the person who it's about and all of those kind of issues.
I suppose many of our listeners, like me, won't have really thought through what's involved in ghostwriting.
We perhaps know what it is, but From your point of view, what are the different strands of involvement?
That would be difficult to replicate.
I mean, just that personal connection.
Usually when somebody decides they want to hire a ghostwriter, that personal chemistry between the subject the author, as we would call them, and the writer is very, very important.
It becomes a sort of cross between sort of a friendship and a therapeutic relationship, I suppose in some ways.
And I have, in my own work as a ghostwriter, I have sort of, you're a go-between.
You're a go-between the publishing house and the author.
You try to protect them in some way from giving more than they need to or exposing themselves in a detrimental way.
And how real...
Is this challenge in your work life right now?
To what extent are you finding that people are asking slightly different things of you because they might be able to use a bit of AI to do some of the tasks that you would perhaps previously have been involved in yourself?
Yes, I find I'm receiving a lot of emails from people who want me to work on something that they've already half written with chat GPT.
So they sort of consider the job to be half done.
It's just a matter of polishing, which is all very well.
And I suppose you could do that.
But they all sound rather samey.
They're all rather written in the same voice, rather than in their own voice.
And also the quantity of work involved for you is presumably less.
You know, they're wanting to pay you less to do it, right?
Well, they want to pay less to have it done.
But I don't agree that the quantity of work is actually only less, because when the ghostwriter sits down with the subject and does interviews and speaks to them for days on end, that wool gathering you still have to do that because you still have to go through the manuscript that's written by chat gpt to sort of work out what the interesting threads are.
And then you have to go and do the interviews anyway, but because somebody's handing you sort of 50 000 words, They don't want to pay you to write 50000 words.
They imagine it's much less work somehow, but it's not.
I mean, can you just give me a tangible idea of the impact this is having on your work life and, I guess, on your income already?
Well, I think I've been very fortunate.
I don't feel because I have several strands to my bow.
So I also, you know, I write novels, I write articles.
And all that kind of stuff.
So it's not been as drastic to me, but I sort of see it coming down the line very much so.
I think that the amount that publishers are willing to pay for ghostwriters is probably going to shrink.
And that's the novelist and ghostwriter Chris Manby with me.
Now the Taiwanese president, Lai Ching-de, has posted pictures on social media of himself eating sushi.
This is a show of support for Japan, after Beijing indicated it's going to halt Japanese seafood imports.
In the post he said it could be a good time to eat Japanese food and it showed the firm friendship between Taiwan.
And What is this row about?
Well, it was triggered by the new Japanese prime minister suggesting that Tokyo could get involved if Taiwan were attacked at any point.
I've been talking to Sajiro Takashita, professor of management and information at the University of Shizuoka.
China has been the largest importer of Japanese seafood, one of the largest imports.
And from that reason I think a lot of fishery in Japan were fairly dependent on the demand from China.
But that said, the fishery itself has declined quite substantially over the past 20 years because of change of our Japanese diet toward more Western food.
And also the participation of employees in that industry has decreased dramatically.
So, you know, overall, it won't be that much of a big hit.
But from a nuance, I would say from impression, or perception point of view, is very, very negative.
That they again, for totally unscientific and only political reason, they have halted the import of Japanese seafood.
And when it comes to food, of course, people really want the product that they want, that they're used to eating and whatever.
So that's why it makes the impact.
Exactly what sort of things are we talking about?
Well, at this point, I think it's Totally unpredictable.
You know, they're arguing about the point of dispersion of nuclear wastewater from Fukushima.
But the tritium, which is basically a substance that has to be diluted, is way under the level of what the Chinese or the Koreans basically disperse into Japan Sea.
In other words, they're a lot safer.
But in spite of that fact, you know they're halting it because they're saying it's Fukushima, which is totally unscientific.
So, you know, basically, there really is no background of their argument.
If you want Japanese seafood, you can't easily source it from anywhere else.
So Chinese consumers will be going without, I suppose.
Are they unhappy about that?
Well, you know, one of the things about China is that most of the consumer there in China probably doesn't know, or won't be able to know, what really is happening, because all the information is controlled by the government.
And I know for a fact that many people, in spite of the Chinese government's warning of not coming to Japan which really is simply silly because of this throw over to government,
I think that's similar, that the consumers probably would want to have the Japanese seafood.
But, you know, if it is restricted by the government in that country, then it is totally restricted.
So yeah, of course they might feel frustrated, but the Japanese government will probably try to alter that anger towards the Japanese government rather than themselves.
And what about the Taiwanese president getting involved with these social media posts eating sushi?
Well basically, I think you know, we have to realize that Japan and Taiwan are in one coalition, along with the United States and the rest of the free world.
And it's only natural for our prime minister to say that, you know, under these circumstances she will be basically going to protect and jointly protect and create a barrier against aggression from China.
She's saying the normalized common sense rather than any, I say, provoking type of comment, like the Chinese government protest.
Do you expect it to work itself out in some way, this?
No, I don't think so.
The Chinese government will never back down on these things, even though, deep down though, they might be wrong.
They know that they are wrong, but they will not back down.
We know that to be a fact.
So for that reason, I think it just has to simmer down along the time, or maybe third party litigation would come in in order to basically sue things out.
And that's Professor Sejiro Takashita with me.
If you go to our website, the business page is at bbc.com slash news.
Much more analysis of those surprising US job numbers.
We've been talking about bbccom slash news from me, Andrew Peach and the World Business Report team.
Thank you for being with us.
