Last week, I spent several days in Philadelphia for the Annual Meeting of the National Association for Business Economics (NABE). The event brings together economists from central banks, think tanks, corporations, and universities to assess the state of the global economy. The theme this year was Global Economy in Transition: Finding Opportunity Amid Disruption. Sessions explored the pressures shaping global business and policy: geopolitical instability, shifting trade regimes, monetary divergence, and the disruptive force of technology. There were also discussions of long-term structural issues such as climate risk, labor markets, and the balance of economic power.

The purpose of this gathering, as my dear friend Kent insists, is not to forecast the price of copper next quarter, but to expose the fundamental choices (and their costs) that reshape our financial lives. While a fun and lively gathering, the atmosphere was serious, analytical, and ultimately, pragmatic.

As Kent and I highlighted two weeks ago, conventional recession indicators suggest a healthy economy, though recent trends in the labor market for college graduates paint a different picture. We pointed to some appalling anecdotes and statistics, including the case of the Computer Science major who submitted 5,762 job applications, only to hear back from none.

This reality begs the question of whether job creation in the age of AI will ever speed up as individuals, companies, governments, and educational institutions adapt. If so, when?

In a podcast interview, LinkedIn’s Chief Economist, Karen Kimbrough, expresses optimism for the future of work in the age of AI. She acknowledges the unusually slow hiring rate for recent grads, but nonetheless offers the reassuring take that current trends are cyclical and that AI-embracing grads will fare the best in the labor market.

If there really is a rainbow after the storm and her forecasts come to fruition, when will we start seeing the evidence of it? What actions must be taken by companies, governments, and job seekers themselves to ensure a future where AI development works in favor of job seekers rather than against them? What does it mean for job seekers to “embrace AI?” What incentives underpin whether or not we, as a society, will work to ensure that AI does not leave today’s college grads behind?

This Diwali season, I’ve found myself in India, surrounded by the warmth of tradition on the one hand, and a quiet undercurrent of frustration on the other. Gold, long woven into the fabric of celebration here, is suddenly the subject of side-eyes and recalculations at the various malls. Coins, bangles, and necklaces used to arrive without question. Now, they come with hesitation and a not so quiet glance at the market.

After all, at present, the price of gold, in inflation-adjusted terms, is not just high. It is downright abnormal.

Over the past two years, gold has been climbing steadily. The world has been volatile in ways both predictable and surreal. Pandemic aftershocks. Geopolitical instability. Sharp turns in policy that never seem to settle. But this moment feels different. This is the first time I’ve heard gold talked about not just as a luxury or an investment, but as a problem.

As an American, I’m struck by the contrast. Back home, gold rarely enters casual conversation unless something has broken, such as an inflation spike, banking scare, war, or the like. There, it shows up in headlines like a red warning light. Here, the conversation is daily, domestic, almost routine. That dissonance is what pulled me into this piece.

Because beneath the cultural cues and personal moments is a larger question. What exactly is gold trying to tell us right now?

This article is not investment advice to go bulk-up on gold (please, talk to your financial adviser!). It is an attempt to listen, carefully, to what gold’s behavior may be revealing about the U.S. economy, its role in the global order, and the patterns that households everywhere should start paying attention to.

Let me be clear: I believe in the promise of AI. As a power user, I rely on multiple foundation models daily to streamline my work and solve problems faster than ever. The productivity is real, the tools are evolving quickly, and the cost per use keeps dropping. Naturally, I want to invest in the future I’m already living. And like many of my colleagues, I’ve tilted my portfolio to give a little extra love to AI-heavy tech stocks. But here’s the thing… I’m also an economist. Which means I’ve seen this movie before. And I know how it ends.

Wealth built on asset bubbles feels exhilarating until the floor gives out. As investors, professionals, and decision-makers, we owe it to ourselves to remember a basic truth: price may ride the wave, but value is tethered to the ocean floor. When the current recedes, the fundamentals remain. That is where wealth actually lives.

This article is a guide to navigating the excitement of asset bubbles, especially the AI boom, while staying grounded in financial reality. It draws on economic history, hard data, and the cautionary tales of past bubbles to offer a simple message: Invest, yes. But don’t forget to check your parachute.

In 2025, if you asked the average economist about the U.S. labor market, the answer might sound reassuring: the unemployment rate is holding steady around 4%, inflation is relatively under control, and job growth continues month after month. But ask a 23-year-old college graduate with a crisp new diploma and a browser full of unanswered job applications, and you’ll hear a different story.

A quiet crisis is unfolding in the United States that eludes headline economic metrics yet is painfully evident in overflowing inboxes, mounting loan statements and waning optimism among young Americans entering the workforce. In mid-2025 the unemployment rate for recent U.S. college graduates reached 5.8%, according to Bureau of Labor Statistics data, its highest level in more than a decade apart from the pandemic spike. More strikingly, this graduate jobless rate now exceeds the national figure, overturning the long-standing pattern in which new degree-holders enjoyed lower unemployment than the wider labor market.

Picture this: you walk into your favorite department store and notice two things at once. First, the racks are heavier with "40% off" tags than you have seen in years. Second, the checkout line feels strangely light, with fewer people and smaller baskets. What’s sad is that this picture may not be all that difficult to imagine…

For professional economists, these signals are not trivial. But for households, they are even more telling. Recessions leave footprints in daily life long before policymakers announce them.

At the time of writing, the probability of an Economic Crisis, defined as the overlap of a firm recession and a household recession, stands at 46.5% over the next three months. The broader likelihood of either type of recession occurring is 82.4%. These probabilities are serious, but they do not have to be paralyzing.

The Honest Economist’s central argument is that recessions are always felt before they are declared. The question is how to notice them and what to do when you do.

For decades, economists have looked beyond GDP charts and payroll data to find meaning in the everyday economy. Some of these informal signals began as jokes, others as casual observations, but many contain a hard truth. When households shift their choices in food, grooming, or even undergarments, those decisions often reflect deeper anxieties about the future.

The federal funds rate is not some simple light switch. You cannot flip it down and flood the economy with prosperity, nor crank it up and instantly stamp out inflation. Yet, time and again, politicians sell it that way.

The latest example comes from the President’s aggressive campaign to slash interest rates by as much as three percentage points, to around 1%. The adminstration insists this will supercharge growth, lower mortgage costs, and save the government trillions in debt payments. But there’s a catch: no serious Fed official supports it.

The effort has become entangled with an even more troubling move. The White House is attempting to remove Federal Reserve Governor Dr. Cook, an accomplished economist whose scholarship spans international and innovation economics. Removing a sitting governor, would be unprecedented. It would also mark a dangerous intrusion of political bias into an institution deliberately insulated from politics.

To understand why this matters, we need to step back. What is inflation? What drives economic growth? And how does the federal funds rate, the obscure-sounding overnight lending rate between banks, actually connect the two?

The answers resist sound bites. That is precisely why treating the Fed’s rate as an on/off switch is both wrong and dangerous.

Ten days running is my tally of hearing some variation of the same uneasy question: “Will we be able to trust the numbers coming out of Washington?”

And these aren't conspiracy theorists or online agitators. They are fellow economists, investors, and business leaders. You know… sensible, data-driven people… who built careers on the assumption that official statistics were, if not perfect, at least honest.

Now that trust is starting to fray.

When government-reported metrics like inflation, GDP, or unemployment begin to sound too clean, too convenient, or too contradictory, the impact goes beyond economic modeling. The unease spills into boardrooms and newsrooms. Financial forecasts lose their foundation. People begin to wonder not just what the economy is doing, but whether they can believe anything they’re being told.

I’ve felt that uncertainty myself. And I’ve heard it in the voices of colleagues, clients, and friends. There is concern, frustration, and a fear that something foundational is slipping away.

But here’s what I say in return: Don’t despair.

Earlier this year, John, a seasoned professional with a major firm, decided it was time for a leap. The stock market had been climbing steadily, financial headlines were full of optimism, and investor sentiment seemed to signal a revitalised economy. And John was getting increasingly tired of feeling left out. So, convinced that growth had returned, he left his stable job to join a consumer–facing start‑up.

Six weeks later, John was unemployed.

The start‑up’s sales projections were built on an assumed rebound in household demand, but real personal consumption expenditures had stalled. Delinquency rates on credit‑card loans were climbing toward the highest level recorded since the early 2020s, and unemployment‑insurance claims had been trending upward since April. Meanwhile, corporate profits after tax had registered their first significant drop in more than two years, and real exports had flattened.

John’s decision was shaped by a popular narrative: when equities rise, the economy must be healthy. That narrative is both persistent and dangerous.

Among colleagues who follow the U.S. economy closely, shifts in policy direction don’t usually come as a surprise. Yet, in recent weeks, a series of reports has indicated that the administration aims to select the next Federal Reserve Chair chiefly for ideological loyalty, favoring a candidate inclined to reduce interest rates regardless of macro dynamics; the prospect has given both these authors a pause.

As trained monetary and financial economists, we’ve spent years studying the delicate architecture that allows the Federal Reserve to function independently from political pressures. When that independence is threatened, so too is the foundation of macroeconomic stability.

This moment, in our view, requires more than private concern. It calls for public reflection.