A woman walks into the US Department of Labor in Washington, DC, January 8, 2026. REUTERS/Evelyn Hockstein
(New York, NY) – Let’s start with a question: when is a “surprising” net job loss not really surprising? ANSWER: It is when nobody knows how to really measure the jobs market in America today.
Yes, the headlines Friday morning were that the jobs report showed a net loss of 92,000 jobs for the month when the economists’ consensus was for a minuscule 50,000 net job gain.
The old economic models in pre-Trump second term America would all tell you that any job number below a monthly net gain of 200,000 wasn’t even good enough to keep up with America’s population growth.
On the brighter side, those same OLD economic models would also focus on the fact that anything lower than a 5 percent unemployment rate is considered “full employment” in America. Friday’s report put that unemployment rate at 4.4 percent.
But this isn’t the old America. This is an America where the long-established employment models are shifting fast, and the already flawed jobs reporting system from the federal government is becoming even less revealing.
The key to understanding the changes brings us back to the still-dominant border issue. According to the Department of Homeland Security, about 3 million illegal aliens have either been deported or self-deported from the U.S. since President Trump returned to office in 2025. That’s no small decrease in population, especially since almost all illegal aliens are either taking jobs in this country, or receiving some form of taxpayer benefits to live here.
This illegal alien exodus is creating another monthly jobs controversy. Since last summer, the Trump administration has said native-born American citizens have been gaining jobs while foreigners (both legal and illegal immigrants) are losing them. Of course this claim has been disputed by liberal economists and left-leaning political pundits, which means we’ll probably never get the full true story on this potential trend. C’est la guerre.
The other absolute wildcard is AI. Anyone who tells you AI is a clear net positive or net negative for human jobs right now is just guessing. Even the big 2,500-person layoffs at Morgan Stanley this week can’t be totally attributed to AI redundancies; because while back office jobs susceptible to AI elimination were a part of the cuts, plenty of workers in the mortgage division were let go too because of likely new restrictions on that business.
But here are some objective facts we can believe right now:
- The “no hire, no fire” jobs market is still the reality in America. Reports, positive or negative, with monthly numbers below 100,000 are almost statistical noise in a country this large.
- AI is having an effect on the jobs market, but it’s just not yet clear if it’s a large net positive or net negative. The wild fluctuations in the stock markets AI trade are a byproduct of that uncertainty.
- Manufacturing jobs are not exploding higher thanks to the tariffs and all the subsequent moves by large companies on-shore blue collar jobs. BUT the bleeding has stopped for the most part for a manufacturing job base that’s still at rock bottom historic levels in America.
No, none of the above is really good news, but none of it is more important than the demographic and macroeconomic changes going on at the same time. Beware anyone who makes too much of monthly numbers when generation shifts are in progress.
