Time to start worrying about jobs?

It was a rocky week across financial markets as concerns about AI and employment trends weighed on sentiment. Bitcoin continued its descent, US Treasury yields moved lower, and the S&P 500 slipped. A growing worry developed that AI firms could eat into the business of traditional software solutions, a large part of both the broader economy and the financial markets.

Last week’s employment data added to the unease and stoked fears that the “low hire, low fire” regime may break in favor of the latter. Challenger, Gray & Christmas reported that January job-cut announcements surged to their highest level for any January since 2009. That echoes the layoff disclosures from large public companies. The hiring side was weak as well. Payroll provider ADP reported that only 22,000 jobs were added in January, below expectations of 45,000.

Other economic markers were in a more positive direction. The ISM Manufacturing Index moved into expansion territory at 52.6, its highest level since 2022. However, the qualitative commentaries described a more cautious tone. One respondent described long-term planning as “pointless” in the face of tariff policies that continue to plague small companies.