Yahoo Finance’s Ben Werschkul reports:

Can AI data center construction lead to a revival in factory jobs?

In response to the strong April jobs report, the White House on Friday suggested that factory workers can count on job growth in the long run, citing a specific metric that is heavily weighted toward artificial intelligence spending.

White House Senior Deputy Press Secretary Kush Desai highlighted "nonresidential specialty trade contractors," a subset within a subset of the construction sector that is closely associated with data center construction. That category saw a jump from 2.8834 million jobs in March to 2.8960 million in April.

"America added 12,600 factory construction jobs in April as trillions in investments continue pouring into American manufacturing," Desai wrote on X, adding it was a "leading indicator ... that the best is yet to come."

"The factory boom that President Trump has talked so much about is visible everywhere," Kevin Hassett, the director of Trump's National Economic Council, added during an appearance on Fox News. "We've got about 70,000 people who have jobs now building factories."

Since January 2025, when Trump took office, nonresidential specialty trade contractor jobs have grown by 67,000, but the rest of the construction sector has contracted, according to the government data. And it's far from certain that the build-out of AI data centers will translate into a significant number of permanent jobs down the road.

Read more here.

Yahoo Finance’s Jared Blikre reports:

Tech is dominating the stock market and shrinking inside the labor market.

That classic K-shaped divide — usually used to describe the US consumer — showed up again Friday after the April jobs report. But this time, the divergence is inside tech itself: Wall Street is paying the highest premiums in at least two decades for the sector’s stocks while its workforce keeps losing ground.

A chart from Kevin Gordon, head of macro research and strategy for the Schwab Center for Financial Research, captures the divide. Tech stocks are trading at an all-time high relative to the S&P 500. (^GSPC) At the same time, tech jobs — using BLS information payrolls as a proxy — have fallen to an all-time low as a share of total US payrolls.

The latest payrolls report made the labor side harder to ignore.

The US economy added 115,000 jobs in April, and unemployment held at 4.3%, but the gains came from areas such as healthcare, transportation and warehousing, and retail. Information employment — the BLS category used here as a proxy for tech jobs — fell by 13,000. The Bureau of Labor Statistics said the group is now down 342,000 jobs, or 11%, from its November 2022 peak.

That’s creating the new K shape in tech. The upper arm is capital: stocks, market value, AI infrastructure, and companies promising more revenue per employee. The lower arm is labor: software, web, telecom, media, and other tech-adjacent jobs no longer growing the way investors might expect from a sector trading at elevated levels of relative strength.

Read more here.

The unemployment rate, which ratcheted up from 4% to 4.5% between January and November of last year, is enjoying much smoother sailing in 2026.

For three of the four months measured so far this year, the jobless rate was 4.3% — rising only to 4.4% in February.

Next week’s inflation report for April should provide clarity on whether prices are rising faster than pay as more Americans express concerns about affordability.

It’s already pretty close. Prices in March were up 3.3% from a year earlier, while average hourly earnings increased 3.5% on an annual basis that same month. In April, average hourly pay was similarly up 3.6% from a year earlier, clocking in at $37.41, Labor Department data show. It remains to be seen whether inflation will be even higher on an annual basis, though some economists see it as likely.

“Inflation is about to eat up wage gains. Wage growth: 3.6% in past year --> That’s likely to be eaten up by April inflation of ~4%,” Heather Long, chief economist at the Navy Federal Credit Union, said in a post on X.

Last month’s job gains were, once again, driven in part by the healthcare and social assistance supersector, which added nearly 54,000 roles. Transportation and warehousing also showed some strength, bringing on more than 30,000 jobs, especially among couriers and messengers.

Employment in information, meanwhile, slid by 13,000 roles, and is down by 342,000 since its most recent peak in November 2022, the Labor Department said. Financial activities jobs also declined by 11,000.

"You have some sectors that continue to grow, continue to show very strong demand for workers — healthcare being that main driver,” Michael Reid, RBC Capital Markets head of U.S. Economic research, said on Yahoo Finance. “And on the other hand, you have some sectors that continue to show weakness."

The jobs report — usually a significant market-moving event — is coming at an odd time for the US economy. Does it still matter for markets?

With the ongoing war in Iran and blockade of the Strait of Hormuz, a critical transportation channel for the world’s energy supply, inflation concerns have become a primary concern for the Federal Reserve. At the same time, the artificial intelligence boom has powered the stock market to record highs.

“It's almost like turning on a fan in a hurricane,” Annex Wealth Management chief economic strategist Brian Jacobsen told Yahoo Finance.

“In a typical environment, you'd probably see a market reaction where this is positive, and there's not really a sign of any sort of wage, price spiral, anything like that,” Jacobsen added. “But everything is being driven by the bigger geopolitical issues that are out there. … This is more about differentiation, right? So in terms of where the industry and sector and maybe specific company opportunities, especially if the lower-income consumer is going to continue to get squeezed.”

The April jobs report surprised to the upside.

US payrolls rose by 115,000 in April while the unemployment rate remained at 4.3%. Economists surveyed by Bloomberg had estimated a median gain of 65,000 jobs.

March’s blockbuster increase of 178,000 roles was revised higher to 185,000 jobs. And February’s jobs report was revised lower to a loss of 156,000 positions.

“So this is a very strong number, and I think it's hard to argue against the notion right now that the labor market is on solid footing,” RBC Capital Markets head of US economic research Michael Reid told Yahoo Finance.

“You have some sectors that continue to grow, continue to show very strong demand for workers — healthcare being that main driver,” he added. “And on the other hand, you have some sectors that continue to show weakness. … Information, and that's one where we see a very high rate of AI adoption.”

Read a full breakdown of. the jobs report.

One thing we’ll be watching when the April jobs report drops is whether an unusual pattern where the data shows dramatic swings from month to month continues.

In March, the US economy again surprised markets by gaining 178,000 jobs. The month before, it surprised with a loss of 133,000 jobs. The effect was nearly a wash, and it’s been oscillating between gains and losses for months.

We’ll find out if we get another surprise on Friday. Economists are expecting a gain of 65,000 jobs.

CNN reports:

Trevor Frampton owns a feed and pet supply store in Santa Rosa, California, with his wife. They have been unable to pass costs on to cash-strapped consumers because he fears they will turn to larger rivals or e-commerce options instead.

Now, Frampton is considering letting employees go for the first time in a decade.

“There is something so wrong with this economy right now. My customers are buying less and they are buying down,” Frampton said. “The only option left is reduction in force – and that just makes my stomach turn.”

Employment at mom-and-pop shops tumbled by 292,200 jobs in 2025 alone, according to the US Congress Joint Economic Committee’s analysis, based on the Intuit QuickBooks Small Business Index. That’s the most since tracking began a decade ago. By comparison, mom-and-pop shops lost 87,800 jobs in 2024.

Read more here.

While overall monthly payroll growth this year is lower than what was notched in much of 2023 and 2024, there’s a reason why economists aren’t freaked out — and why even a smaller-than-once-typical gain might appear strong.

As the population ages and immigration plummets, the amount of job growth needed to sustain a level unemployment rate is also sliding — a point Federal Reserve Chair Jerome Powell made earlier this year.

He noted in March that while there had been “zero net job creation in the private sector,” that may be “about what the economy needs in terms of dealing with very, very low — nonexistent, really — growth in the labor force, which, of course, we’ve never had in our history.”

April’s jobs report is on deck for Friday morning as market watchers look for signs that the labor market is stabilizing.

Economists surveyed by Bloomberg estimate a median gain of 65,000 jobs and expect the unemployment rate to remain flat at 4.3%, following March’s blockbuster increase of 178,000 roles.

There was already one glimmer of strength this week in private payroll growth, according to data from ADP: Private employers added 109,000 jobs in April, the fastest monthly gain since January 2025. And looking backward, March’s hiring rate improved to its highest level in nearly two years, government data released Tuesday showed.

Read more here.

In addition to the Cloudflare (NET) job cuts (as my colleague Molly details in the post below), the freelancer platform Upwork (UPWK) announced a restructuring alongside its quarterly earnings report.

Upwork plans to reduce its headcount by 24%, the company said. That amounts to around 151 jobs, as Upwork has about 630 full-time employees, according to Yahoo Finance data.

Upwork attributed the restructuring to an effort in cost discipline and increasing profitability as it focuses on developing internal tools. The company is currently undergoing a pivot to become more AI-forward.

“While the overall impact of AI is marginally a net headwind for Upwork today, we are confident it will become a longer-term tailwind,” the company said.

It added that it expects to incur one-time charges of $16 million to $23 million this quarter due to severance and separation costs.

US labor productivity grew in the first quarter but at a slower pace than in the previous three quarters, the Bureau of Labor Statistics said on Thursday.

Nonfarm productivity, which measures workers’ output per hour, ​increased at a 0.8% annualized rate in Q1, as output rose 1.5% and hours worked increased 0.7%. Economists had expected nonfarm productivity to increase 1%.

Labor costs increased 2.3% in the first quarter of 2026 over last year, as hourly compensation increased 3.1%.

Yahoo Finance’s David Hollerith reports:

As the AI boom spurs activity across almost every corner of Wall Street, bankers are coming out on top in compensation hikes.

“The big banks had a very good 2025. They’re doing at least as well, if not better, this year, and pay will be up significantly,” Alan Johnson, managing director of Johnson Associates, said in an interview.

“They’re going to be pay leaders for the first time in probably a decade,” Johnson added.

About half of Wall Street workers are expected to see some increase in compensation in 2026. IPO and M&A bankers are estimated to see the biggest jumps, up as much as 20% from last year, according to first quarter compensation projections from consulting firm Johnson Associates.

Read more here.

About 8 in 10 Americans believe artificial intelligence will displace more jobs than it will create, though that pessimism varies by age group.

That’s according to a new NPR/PBS News/Marist Poll survey of 1,322 adults conducted at the end of last month. Overall, 79% of respondents believed AI would be biased toward job losses rather than job gains, a sizable jump from 67% in July of 2025. Baby boomers and older generations expressed the least optimism that AI would create jobs, while 26% of Gen Z said the technology could foster job creation, making them the most optimistic.

That generally tracks with recent data on the attitudes among those who use AI more heavily. A recent report from Handshake found that graduating seniors who use the technology felt less pessimistic about the job market compared to non-users, and a global survey from ADP reported that workers who frequently tap AI were generally more confident that their jobs were safe from elimination.

Job cut announcements jumped 38% in April from a month earlier, with tech layoff plans continuing to mount, the global outplacement firm Challenger, Gray & Christmas said in a report Thursday.

US employers revealed 83,387 planned job cuts last month, up from 60,620 in March but lower than the 105,441 cuts announced in April of last year. The tech industry alone was responsible for 33,361 layoff announcements, and AI was the leading reason for the second month in a row.

“Technology companies continue to announce large-scale cuts and are leading all industries in layoff announcements,” said Andy Challenger, the firm’s workplace expert and chief revenue officer. “They are also often citing AI spend and innovation. Regardless of whether individual jobs are being replaced by AI, the money for those roles is.”

Read more here.

With layoff announcements coming seemingly every week from companies like Meta (META), Coinbase (COIN), Oracle (ORCL), and Snap (SNAP), it may seem like job cuts are rampant in the industry.

And while the number of employees spiked in the first quarter of this year, the chart below from Layoffs.fyi shows that reported layoffs are still below those in late 2022 and early 2023.

Layoffs.fyi data shows that so far in 2026, 106 tech companies have laid off 93,294 employees. In 2022, that figure was around 165,000 for the whole year, and in 2023, that figure rose to 264,000.

We still have over half the year left, and more corporate restructuring may be on the way (Meta, for instance, is reportedly planning a second wave of job cuts), but right now, total layoffs for the year so far are still below Q1 2023 alone.

Yahoo Finance’s Emily Batdorf writes:

In the 12 months from February 2025 to February 2026, wages actually outpaced inflation. According to the Bureau of Labor Statistics (BLS), real average household earnings increased 1.4%, seasonally adjusted, during this timeframe.

If these numbers don’t seem to be reflected in your budget, it’s likely because wages have been playing catch-up to inflation over the past several years.

Recent inflation trends: The Federal Reserve aims to keep inflation at a rate of 2%. But post-pandemic, supply chain disruptions and changing demand, among other factors, led to a rapid rise in inflation. One inflation measure — the Consumer Price Index (CPI) — rose to more than 9% over 12 months ending in June 2022.

Inflation has slowed since. But that doesn’t mean prices have dropped — it just means they haven’t been rising as fast.

Recent wage growth trends: On the other side of the equation is wage growth. Data from Bankrate’s Wage To Inflation Index found that from January 2021 to August 2025, wages still lagged behind inflation by 1.2 percentage points.

The gap between wages and inflation was previously as big as 4.8 percentage points in 2022, so things are trending in the right direction for earners. However, relatively flat real wage growth (taking inflation into account) means that bills may still feel tight.

To summarize, real wage growth has been mostly flat since inflation took off post-pandemic. Even though real wage growth was positive in the last year, it’s still “catching up” after falling behind several years ago.

Read more here.

Yahoo Finance’s Brian Sozzi writes:

Being realistic about how AI can change your job could save your career or help you develop a lucrative new one.

“You gotta be as honest as you can with yourself and take a look at, is my job something that AI can take? Or is my job something that if I get good at AI, will be more in demand? If it's one that's truly going be taken, then you're going to have to re-skill now,” Tony Robbins told Yahoo Finance at the Milken Institute conference this week.

Robbins added that some companies are providing capital to re-skill workers instead of simple layoffs. However, he contended that AI-driven displacement will become “a bigger issue in the next 24 months. I think the government's going to have to intervene if companies really displace,” he said.

Read more here.

St. Louis Fed president Alberto Musalem said Wednesday that the job market is less of a concern for the central bank than inflation right now.

“The risks have been shifting towards more risk on the inflation side than the employment side,” Musalem said at the Mississippi Bankers Association 2026 Annual Convention in Alabama, as Yahoo Finance’s Jennifer Schonberger reported.

Musalem noted that the risks to the central bank’s two-sided mandate — maximum employment and price stability — have shifted recently. While inflation has remained “meaningfully above” the Fed’s 2% goal, Musalem said, the job market has stabilized.

Still, Musalem added that comments he’s heard from hiring managers suggest hiring would be stronger if not for the broader uncertainty in the economy right now, particularly as the US fights a war with Iran.

“The CEO of a major company that produces inputs for industrial manufacturing said to me recently that uncertainty is so high and that's the reason why [he’s] not hiring,” Musalem said. “He said the best worker to fire is the one that I haven't hired, because of the uncertainty.”

Read more here.

ADP chief economist Nela Richardson called April’s private payroll gains “very solid” in a call with reporters on Wednesday, while noting that much of the job growth was concentrated in health services and education.

That supersector, which has been responsible for powering the labor market as other industries shed jobs over the past several months, added 61,000 private-sector positions in April. The second-best performing sector — trade, transportation and utilities — posted 25,000 new roles.

Also notable: Manufacturing added 2,000 roles in April, which “snapped a two-year losing streak in terms of monthly private net gains,” Richardson said.

Of the 109,000 jobs that private-sector employers brought on in April, 43,000 were at businesses with 1 to 19 employees.

That made the smallest companies the leaders in payroll growth last month, just barely outpacing firms with 500 or more employees, which added 42,000 roles.

But those positions at tiny firms are often only part-time, and can pay less, ADP chief economist Nela Richardson noted.

US private employers added 109,000 jobs in April in the fastest monthly gain since January 2025, payroll processor ADP said Wednesday.

Economists surveyed by Bloomberg had expected an increase of 120,000 roles after February and March each posted an excess of 60,000 positions. ADP’s report may build on the sentiment that the labor market is showing some signs of stability after a bleak 2025.

Read more here.

Yahoo Finance’s Ivana Pino writes:

If you’re worried about a potential layoff, don’t wait until the bad news comes your way to take action. There are steps you can take to position yourself to ride out a period of unemployment.

1. Know your rights and benefits: Look over your employment contract to find out what happens to your insurance benefits upon termination, whether you’ll still have access to any employee benefits once your role comes to an end, and if you’re entitled to a severance package.

2. Revisit your budget and have a backup plan: Start by reviewing your current monthly spending and income. You can use a budgeting app or an Excel spreadsheet to categorize expenses into fixed and variable expenses.

3. Pad your emergency fund: Many experts suggest keeping at least three to six months’ worth of living expenses in an emergency fund, but you may want to aim for more to give yourself more breathing room in case it takes several months to find a new job.

4. Prioritize paying down debt: By making extra payments toward your debts now, you’ll decrease the amount owed, pay less in interest overall, and be free of those payments months or years sooner.

5. Diversify your income sources: Now could be a good time to take inventory of your professional skills, certifications, and hobbies that could translate into income-generating opportunities.

Read more here.

Yahoo Finance contributor E. Napoletano writes:

If you’re in the midst of buying a home, a layoff or job loss probably has you worried that those plans have hit a wall. You might be wondering: Can I get a home loan without a job? The answer is yes — but qualifying takes some extra work, more transparency, and a mortgage lender willing to get creative about how they verify your ability to repay the loan.

A steady paycheck has long been the simplest way to prove that you can afford a mortgage. But lenders don’t necessarily require you to have a job per se — they require an ability to repay what you borrow.

… “The purchase itself isn’t the problem,” Andrew Colombo, chief credit officer at the VA mortgage lender NewDay USA, said in an email interview. “The challenge is the financing.”

To qualify for financing (i.e., a mortgage loan), you’ll need to show a lender you have a steady stream of income or assets that can satisfy your monthly mortgage payment. Income from a job is but one of those possibilities.

Colombo notes several others, including “fixed income from Social Security, military retirement benefits, pensions, and 401(k)s” as viable assets and income streams that lenders can consider when assessing your ability to repay in the absence of job-related income.

Read more here.

More and more companies have announced job cuts linked to artificial intelligence efficiency (see PayPal below), but few have stated the reason as starkly as Anthropic (ANTH.PVT) CEO Dario Amodei — at least for software companies.

Yahoo Finance’s Dan Howley reported on Tuesday that Amodei said software-as-a-service (SaaS) companies that don’t evolve with AI could face ruin. Howley writes:

Amodei made his comments as part of a conversation with journalist Andrew Ross Sorkin and JPMorgan (JPM) CEO Jamie Dimon during Anthropic’s The Briefing: Financial Services event.

“I think if your moat is ‘our software is complex and difficult to write, and we can write it, and others can’t match it,’ I think that’s going away,” Amodei said.

“I don’t know what will happen to the group of today’s SaaS incumbents as a group that’s more indeterminate. I think individual SaaS companies, it’s very possible for them to lose market value, go bankrupt, completely, go bust, but it depends on the response,” he added.

Read more here.

Job cuts are likely at PayPal (PYPL) in the future as new CEO Enrique Lores seeks to turn the payments company around. According to a Bloomberg report, PayPal plans to reduce its workforce by 20% — or more than 4,500 jobs — in the next two to three years.

“We are taking deliberate steps to sharpen our strategy, simplify our organization, and improve both our growth trajectory and cost structure by focusing our investments where we believe they will have the greatest impact,” Lores said in a statement.

According to the company’s first quarter earnings materials, PayPal plans to target at least $1.5 billion in savings over the next two to three years, bolstered by an “AI transformation and simplification function to drive enterprise-wide growth and efficiency agenda.”

Hordes of fresh college graduates will soon enter a job market rife with anxiety — whether due to artificial intelligence or dismal hiring rates — as their parents and social media feeds hover expectantly.

That can’t feel good.

Though the country’s labor picture has improved somewhat in recent months, with the unemployment rate hovering around a relatively low 4.3% despite little job growth, young people still undoubtedly have to fight for work. Junior-level job postings are down, those out of work are staying unemployed for longer, and even Federal Reserve Chair Jerome Powell recently acknowledged that people without a position “will have a hard time breaking in unless somebody quits their job,” which workers broadly aren’t doing.

Kelly Collins, executive director of the Rockwell Career Center at the University of Houston’s Bauer College of Business, said some members of the center’s employer advisory board have slashed entry-level hiring by 25% to 50% since 2023. Bosses were relying on past interns to fill open roles and taking fewer risks on brand-new faces.

“There are a lot of employed people who have gotten laid off,” Collins said. “Our graduates are competing with students who are out two to three years that have the experience and can start from Day One. So our students need to be building skills any which way they can.”

Read more here.

Add Coinbase (COIN) to the list of companies making sweeping layoff plans as they pivot sharply toward artificial intelligence.

Yahoo Finance’s David Hollerith reports:

Coinbase Global said Tuesday it’s letting go of 700 employees in the coming weeks.

The move, which amounts to a 14% reduction in the crypto firm’s headcount as of May 1, is intended to manage operating expenses “in response to current market conditions” and “optimize the Company’s operations for the AI era,” according to a regulatory filing.

“Two forces are converging at the same time,” CEO Brian Armstrong said about the restructuring in social media post on X, adding, “We need to be front footed to respond to both.”

In addition to the cuts, Armstrong said Coinbase aims to have “no pure managers” and will shrink its organizational structure to a maximum of five layers between top executives and all of the firm’s remaining 4,300 workers.

Read more here.

Though job openings were roughly unchanged in March, available positions increased in construction and manufacturing, as well as finance and insurance, where openings increased by 98,000. Availabilities also moved higher in healthcare and social assistance — a sector that has driven much of recent job growth.

However, the number of available positions slid in business and professional services, which lost 318,000 openings just between February and March.

Guy Berger, director of economic research at the Burning Glass Institute, wrote on X that the Labor Department’s most recent data release posed “more of a mixed bag than I expected” thanks to improved hiring, worse layoffs, and a steady quits rate in March — all while that month’s jobs report showed stronger payroll growth and a slightly lower unemployment rate of 4.3%.

“Layoffs did tick up — a contrast to other high quality indicators in March (CPS, claims),” he wrote in a thread. “I'm not particularly worried about the increase which is probably just noise, though if it progresses further that would be bad.”

Layoffs and discharges moved higher in March, government data showed, hitting 1.9 million compared to 1.7 million in February. The layoff rate, at 1.2%, was at its highest level since October.

Where did the job cuts occur? Largely in professional and business services, which saw cuts increase by 99,000 between February and March, according to the Labor Department. Trade, transportation, and utilities also laid off workers. Layoff levels were highest in the Midwest, South, and West.

Job openings barely budged in March as the hiring rate reached its highest level in nearly two years, Labor Department data released Tuesday showed. But layoffs also crept higher.

Some 6.87 million jobs were open in March, according to the Job Openings and Labor Turnover Survey (JOLTS) from the Bureau of Labor Statistics, slightly above economists’ expectations of 6.85 million openings and just below February’s revised number.

The hiring rate, which in February plummeted to its worst level since the early days of the pandemic, improved to 3.5%, matching levels last seen in May 2024.

Read more here.