In our business, precision is power. We build predictive models for clients making some of their biggest fiscal decisions. A couple of months ago, one of our best performers, a model that had nailed inventory needs quarter after quarter, started to drift. Its forecasts weren’t wrong, exactly. Just… fuzzier. The prediction intervals widened. The signals got noisier.

When we investigated, the culprit wasn’t the math; it was the map. Our assumptions, built on decades of reliable data from America’s gold-standard statistical agencies, were suddenly out of sorts. Tariff tremors, policy-driven supply distortions, and even now a federal shutdown have all disrupted the data we depended on.

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 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.

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 revitalized 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.

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.