My lived reality has deviated further and further from national narratives I've been seeing from the media and official data. The national unemployment rate in the US has ranged from 3.5% to 4.2% since December 2022 to August 2025. GDP grew 2.9% in 2023 and 2.8% in 2024. And most astonishingly, the S&P 500 has soared from $4000 to $5700 in that time period, a 42% growth. These rosy healthy indicators contradicted my experiences of a brutal job market and a dramatic decrease in living standards. Looking around my peer group, I saw a lot of similar signs. My girlfriend was laid off by her architecture firm, followed by her former co-worker and her husband, and then my friend and his wife. Three full couples in Seattle were simultaneously unemployed.
Most importantly, the job search process was brutal! The endless automated rejections, applications that require re-entering one's resume and the difficulty of speaking to a person made the process soul-sucking.
All these anecdotes had left me feeling like the economy was not strong. The dissonance between the top-level economic indicators and my experience was distressing, particularly when a business analyst would look at the 4% unemployment and say, "well at least it's easy to find a job right now."
And all this was before Trump came back in and slapped illogical tariffs. I was questioning our job numbers methodology before he fired the head of the Bureau of Labor Statistics. Cost of living was challenging even before the ICE raids curbed the immigration labor supply and added fear to our lives. This was before DOGE slashed tens of thousands of federal government jobs, including many jobs that support the knowledge infrastructure that business rely on. Every ounce of my belief system, informed however it may be by political bias, told me that this connect be good for the economy.
And while there are signs of slowing growth, worsening hiring numbers, and increasing costs, they've been pretty minor. The US economy is a massive beast and it's hard to tell what's going on. I think it's fair to say that a lot of economic predictions from those on the left that were made as the policies above were announced have not yet panned out. And the stock market as a whole is on a roar, hitting all time highs.
Here are the anecdotes and my theories on the state of the economy:
- So many people I met at my climate co-working space were long term job seeking. Many others have started their own business or consultancy but haven't really gained traction.
- My friend in a niche industry spoke to a hiring manager when no roles were available. A few months later, the company opened up a role with him in mind. The hiring manager told him to apply. He did that day, then got an automated rejection email. Although the company reversed that automated rejection and interviewed him, it was telling that the candidate that they wrote the job posting for could not pass the algorithmic filters.
- New graduates are getting crushed in the job market whether it's Harvard MBAs or Purdue comp sci graduates.
- It's really bad in tech period for job seekers.
- The construction and development world has been slow since 2022. I couldn't find historical crane count, but my friend in the Seattle real estate development industry has told me it's been bleak. The Architectural Billings Index has been pretty bad for a few years - https://inside.lighting/lighting-industry-market-info/architecture-billings-index. Billings have declined for 28 of the last 31 months and only the south is slightly above historical averages.
- Microsoft has laid off 15000 employees this year, even as they are reporting excellent growth and their stock price is going up.
Theories:
- The BLS unemployment estimation methodology is flawed. The response rate to the Current Population Survey (CPS) dropped from an 82% response rate in Feb 2020, plummeted during Covid, and never fully recovered. It was 68% in April. The CES is even worse, going from 60 to 42%. How could estimates not be getting worse?
- Lots of people are underemployed. This isn't something that's tracked very well,
- The % of Americans getting healthcare from their employer has dropped from 65% to under 50% within a couple decades. This is again not super well tracked, but in a country where healthcare is so messed up, not having employer-sponsored health plans leads to real problems. Many blue collar workers are in the gig economy without healthcare, and more and more white collar workers are doing contract jobs also without healthcare.
- Consumer expenditure has been pretty steady, which has been puzzling. But when you realize consumer expenditure includes spending on private healthcare, it becomes more clear. When an employer buys healthcare for their employees, it does not show up in consumer expenditure. So people losing jobs can actually increase consumer expenditure. FYI, as a healthy young person, I still paid between $350 and $750/month on private healthcare after my layoff (and never reached my deductible, so the healthcare never covered anything).
- AI investment is propping up the economy, and much of that is foreign direct investment. So much oil money from Saudi Arabia or UAE's sovereign wealth funds are going into AI. Whether it's buying the infrastructure, direct investments into private companies like OpenAI or Anthropic, or into publicly traded companies, it all has the net effect of boosting stock prices.
- AI is making knowledge workers more productive, but even more importantly, CEOs think that it should make them more productive, so they aren't hiring.
- Lots of inventory was moved into the US before tariffs were enforced. That front-run inventory will run out, and if tariffs are still in place it will increase prices.
- Building stuff is expensive because labor is artificially constricted in America. Our immigration system, which needed reform 20 years ago and still hasn't gotten it, lets in way, way, way, way less than market forces desire. If supply and demand were unconstrained, if we truly had a labor free market, I believe America could go from 350 mill to 750 mill. We have lots of bureaucratic red tape and poorly-crafted policy and a litigious society that also makes building prohibitively expensive, but the labor constraints play a major part.
- Resume algorithms favor the same people. With all algorithms, there are winners and losers. I suspect that even with a diversity of job types out there, there are certain people that consistently filter to the top. They probably get lots of interviews and can bounce from job to job. The algorithmic losers will stay shut out, which itself is a negative feedback loop. Being out of work longer will make a resume look worse and often negatively impact one's mental health.
- LinkedIn easy apply and online job boards. It's gotten so easy to apply online that such an application is meaningless. When getting so many candidates, using an algorithmic filter almost seems defensible. Oftentimes it seems that the real filter is getting an inside referral. The very tool that promised to democratize access, the internet, has ironically turned job hunting into an even shinier version of an old boys’ club.
- The people who configure the tools are usually not hiring managers, but people in HR and recruiting who don't usually know what they're doing. And there's no a true feedback loop in the sense that if you filter out the best candidate, you'll never know. As long as the filter lets in qualified candidates, the system will look good, but it isn't likely optimized. These filters can also easily introduce bias.
- These filters have been in use for a while but when the job market favored job seekers, manual touch was more necessary. With the numbers in employers' favor, there's no reason/ability for them to look through most applications.
- Remote work attitudes have not stabilized. Employers' willingness to let employees work remotely can range substantially, with
- There was a hiring boom in tech for many years culminating in 2021, and that motivated many more people to get CS degrees and retrain in boot camps and so supply of workers has been high.
- Microsoft isn't alone - they are emblematic of the successful tech company that is betting hard and spending big on AI. They are cutting other areas, choosing not to innovate in those and instead relying on entrenched market position.
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