May job growth putting to bed fear around job loss due to AI, says Apollo's Torsten Slok

Summary

Apollo chief economist Torsten Slok discusses the May jobs report and its implications for the economy and Fed policy. He argues the economy is overheating due to AI spending and fiscal stimulus, not stagflating. He warns that the Fed may need to shift from easing to a hiking bias if momentum continues.

• May jobs report beat expectations, showing strong job creation.
• Slok highlights the AI spending boom and the 'One Big Beautiful Bill' as dual growth engines.
• He argues these forces are more inflationary than stagflationary, countering previous fears.
• Job growth in AI data centers and energy construction is robust, reducing labor displacement worries.
• Slok expects the Fed to remove its easing bias at the next meeting and possibly adopt a hiking bias by July.
• Upward inflation pressure also comes from tariffs and energy prices.