On the surface today’s jobs report was very strong: headline payrolls came in nearly double the expected (115K vs 65K), with unemployment flat just so Trump’s chief economist Kevin Hassett could push bullish taking points in today’s TV circuit such as this one.
- *HASSETT: ‘RIP-ROARING’ JOBS MARKET
Unfortunately, below the surface this was the ugliest jobs report in years, and one could say even more cooked than last month’s laughable surge in jobs (which was revised from 178K to 185K).
Here’s why.
First, while the Establishment survey showed an impressive 115K jump in jobs when virtually everyone was expecting a big drop, looking at the composition reveals two things: the biggest contributor was semi-government jobs from the Education and Health services category which added 46K, and has been the biggest, and only consistent source of jobs growth this decade.
But even more remarkable was the surge in courier and messenger jobs, which soared by 38K in April, reversing the 52K drop last month. Was there a Doordash or Uber hiring binge that we missed last month? We thought they were mostly laying off their thousands of illegal alien workers…
In other words, just two job categories accounted for almost all the job gains in April. As for the beating heart of the US economy, manufacturing jobs, they tumbled to -2,000 after surging 15,000 in March, the first negative print of 2026. Manufacturing jobs are now down 73K over the past year. Chemicals, Wood, and Machinery manufacturing are the biggest losers, but few subsectors are doing well
But what is even more concerning, is that the entire base of the monthly print was put in doubt after the BLS reported that in April, the Birth/Death adjustment “added” 391K jobs, which as we have explained repeatedly are not actual jobs but a baseline for model assumptions what the number of jobs in a given month “should” be. One would think after all the huge negative revisions to jobs under Biden as a result of flawed BIrth/Death assumptions the BLS would have learned its lesson. One would be wrong.
But stepping away from the Establishment survey, things are even uglier in the much more accurate Household Survey. It is here that we find that contrary to the abovementioned payrolls increase, the number of employed workers actually declined by 226K in April. Worse, this wasn’t a one off: as shown below, the number of employed workers has been declining every month this year, and is now down an average of 343K jobs every month of 2026 after hitting a record high in Dec 2025!
Unfortunately, this means that we are once again witnessing the infamous divergence between the Household And Establishment surveys, as the number of employed workers has been declining and is now the lowest since December 2024 ot 162.622 million, the number of payrolls (tracked by the Establishment survey) is now at an all time high of 158.735 million, a number which is clearly not supported by the data.
This divergence is also why the unemployment rate remained at 4.3%: even though employment shrank by 226K to 162.622 million, the unemployment rate did not rise because people left the labor force.
There was more rot under the surface, as the number of full-time jobs in April plunged by 424K, while part-time jobs surged by 123K.
The drop in full-time jobs dragged the total number of full-time workers to levels last seen in December 2024. In other words both total employment and full-time jobs are back to where they were when Trump was elected.
But while all of the above is just the usual statistical gimmicks we have exposed every year for nearly two decades, there was something much more ominous in today’s report: AI is finally coming for your job… if you are a programmer that is.
While the total number of jobs in April rose, on the abovementioned low quality Health and education and courrier (?) jobs, information jobs dropped again, sliding by 13K, having slid again… and again… and again. In fact, as shown in the next chart, Information jobs have now been negative every month since 2024!
Don’t expect that to change any time soon as the impact of AI “jobs outsourcing” is now here: as Goldman Delta One head Rich Privorotsky noted, we are seeing a flood of tech layoffs among which Cloudflare laying off 20%, Paypall firing 20%, Upwork 25%, Bill Holdings 30%, Coinbase 14%, Meta 10%, Microsoft 7%… and Google saying 75% of new code is now AI-generated (and about to layoff double digits too). This excludes the bloodbath across the crypto sector where the crypto winter coupled with AI has led to especially brutal mass layoffs.
Tech companies announced 33,361 job cuts in April, according to data from outplacement firm Challenger, Gray & Christmas Inc. So far this year, the industry has planned 85,411 cuts, up 33% from the same period in 2025.
“Technology companies continue to announce large-scale cuts and are leading all industries in layoff announcements,” said Andy Challenger, the company’s chief revenue officer. “Regardless of whether individual jobs are being replaced by AI, the money for those roles is.”
According to Layoffs.FYI, Q1 has seen the most tech related layoffs since the tech recession of 2022.
As Goldman’s Privorotsky puts it, “this phase has been the capex boom to enable what eventually becomes a far more radical labor adjustment cycle.” Which means workers are laid off to make space for capex spending and the occasional stock buyback.
As he concludes, that may ultimately be what the market believes a future Fed reaction function will revolve around…AI-driven productivity disinflation eventually allowing a much deeper cutting cycle. In short, the Universal Basic Income that we predicted over two years ago is coming to pay for welfare for the tens of millions soon to be laid off due to AI, is now on its way.
Market pricing so much AI success, it will need to leave about 100 million people without a job.
Bring on the UBI
— zerohedge (@zerohedge) January 24, 2024