SCOTT SIMON, HOST:
We look at the economy now. The Labor Department says the United States added 178,000 jobs in March to bring the unemployment rate down a tenth of a percent. But revisions to February show a loss of more than 130,000 jobs that month. While January was revised slightly up. We also know that prices are up and consumer sentiment is down. Heather Long joins us now. She's the chief economist with Navy Federal Credit Union and author of the Everyday Economics newsletter on Substack. Thanks so much for being with us.
HEATHER LONG: Thanks for having me.
SIMON: What are we seeing?
LONG: Well, it really feels like a yo-yo right now that's going on in the economy. We're talking about the job market. And when I saw the data on Friday morning, I said, wow. This looks great. You know, 178,000 jobs added in March - certainly no impact from the war in Iran yet. But obviously, people are frustrated because if you step back, there's been virtually no hiring since last April, except in health care. If you strip away health care, most other industries have been doing layoffs. And obviously, that's a really hard environment.
And I think it's indicative of what we're seeing across the economy, which is jobless growth. You know, on the one hand, the economy is still growing. We got this AI boom, but on the other hand, the middle class is frustrated. You can't change jobs, and the - obviously, the gas prices and the tariffs are having a real impact on people.
SIMON: Are the jobs going to AI one way or another?
LONG: Not yet, but it's - I would say it this way. It's not that AI can do very many people's jobs - maybe a few coding jobs. But companies are spending so much money investing in AI and the latest technology that there simply isn't a lot of money left to hire or to give big pay raises anymore. And so it's almost like the AI investment is eating the jobs. And now there's concern with the war in Iran that as these gas and diesel prices rise, if they stay high and stay elevated, that's also eating into company budgets, and does that force even less hiring or, potentially, layoffs later this year?
SIMON: Is that what we call - and I'm not sure why - the K-shaped economy?
LONG: Yeah. The K-shaped economy - I believe I helped name that last year - but it's this concept that people in the top 20% - which is basically people earning $170,000 or more - they're doing really well. Generally speaking, they are benefiting from the AI investments, which have really driven big stock market gains. I know the stock market had a little bit of a correction in the last few weeks, but by and large, it's been a great couple of years for investors. And those folks - they don't worry that much. Many of them drive Teslas and whatnot, and so they're not as worried about the gas prices. And they just keep spending and spending, and we can see it in our data.
You know, we have 15 million members at Navy Federal. We track credit and debit card spending every day, and a lot of those top-of-the-K folks - they went out and booked their summer vacations in March because they wanted to get in ahead of the airfares going up. So they were spending like crazy in March to lock in, you know, the lower prices.
SIMON: Let me ask you about revisions that have now become common to the monthly figures. What do you make of that?
LONG: It's really hard to watch. Basically, what's going on is the - a lot of the data that you see with 178,000 jobs added in March, it comes from a survey - you know, a survey of over 100,000 businesses. And basically, people don't like responding to surveys anymore, including businesses. And so in the first few weeks when that data is collected, not many businesses respond right away. But by the second and the third month - so by 90 days after the deadline - most companies do respond. And so that's why you see these revisions. They're being revised because they actually are getting a lot more data, a lot more survey responses in. But the big question is, why can't people respond when you need them to a lot faster, like they used to?
SIMON: What are the important numbers to look at in the economy, as far as you're concerned? Is it jobs? Is it consumer sentiment? What is it? The stock market?
LONG: The biggest concern right now is obviously the war in Iran. You know, how long is it going to last? When is that Strait of Hormuz going to open? And really, from an economic perspective, it's, when do these prices get so high that Americans stop spending on other things?
SIMON: What's your advice for American families now?
LONG: It's good to be cautious. I think for most people, it's really paying off credit card debt and trying to save a little bit more because in uncertain times, you just don't know.
SIMON: Heather Long, who is the Navy Federal Credit Union's chief economist. Thank you so much for being with us.
LONG: Thanks for having me. Transcript provided by NPR, Copyright NPR.
NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.
