WSJ's Greg Ip: The euphoria around U.S. economic prospects isn't translating to job creation
Speakers
Greg Ip
— Chief Economics Commentator and Deputy Economics Editor, The Wall Street Journal
Steve Liesman
— Senior Economics Reporter
Summary
Greg Ip and Steve Liesman discuss a disconnect between record U.S. stock market performance and weak job creation. Greg Ip calls it a jobless boom, with AI-driven earnings and widening margins lifting equities even as hiring stays weak. They also debate whether weak labor demand is cyclical or secular and what it means for Fed inflation policy.
- S&P 500 hits new records while retail sales and job growth weaken
- Greg Ip says earnings are rising faster than prices and margins are widening
- AI is described as a key driver of market euphoria and capital returns
- Weak job creation and low labor demand are linked to both cyclical and secular forces
- Steve Liesman flags construction, manufacturing, and natural resources as areas with emerging wage growth
- Fed officials are seen focusing on AI, oil, commodities, and pass-through pricing rather than the labor market for inflation
Ideas
Jobless boom keeps lifting U.S. equities.
Greg Ip argues that the U.S. has entered a 'jobless boom' in which the S&P 500 keeps hitting records because earnings are rising faster than prices and profit margins are widening as companies add revenue without hiring; for owners of capital this is a great economy, so the equity market can keep romping higher even with weak job creation.
AI boom drives market and earnings.
Greg Ip identifies AI as the specific force driving the U.S. market euphoria, earnings gains, and widening margins, saying AI-driven optimism is gripping the market and that AI will make the economy even greater for capital owners.
