We are going to be unemployed.

We are never getting a job.

And I applied to 647 roles before I got one.

One of my friends had an AI interview.

The AI did the interviewing.?

Yeah.

Someone tell me. Someone tell me and explain to me what is going on with the job market recently.

Okay, okay, I'll do it.

As you've just seen, to a lot of especially young people, it feels like it's really difficult to get a job right now.

Sure.

Officially, the economy is still doing quite fine and stock markets are certainly super high.

So what's going on?

Why is it so difficult to get a job right now?

According to a large share of bosses, the reason is simple. Most tasks carried out by entry level colleagues could be performed by a AI.

But is that really true?

Is the job market really that bad?

Is it especially bad for young people?

And most importantly, is it bad because of AI or are bosses just saying that because it's much less politically risky than blaming Donald Trump's trade war?

Or it's easier than admitting that they hired too many people during the pandemic.

That is the question economists have been doing a ton of in-depth research about.

And yes, as always here on Money and Macro, we will spare you the need to read all of that yourself.

And we have summarized the three most important explanations for this phenomenon in this video.

But before getting into exactly what they are, let's have a quick look at the data.

Are these TikTokers right?

Is it actually difficult to get a job right now?

The most obvious place to look first is the unemployment rate.

That is, the percentage of working age people actively looking for a job, but who cannot find one right now in the US, we can clearly see that indeed, unemployment has been rising since the summer of 2022 from about 3.5% to 4.3%.

Meanwhile, in big European economies like the UK, Germany, where a job market crisis has also been in the news a lot, we can also see that unemployment is already heading back towards levels only seen in the pandemic.

But what's really striking, though, about the labor market today is that we have seen that despite some really spectacular layoffs at high profile companies, and the rise in unemployment really does not seem to be driven by so many more layoffs, but rather by a quite spectacular fall in new job postings by companies.

As we can see here. That trend holds for the US, but also for the UK and Germany.

However, if we look at whether or not young people in particular are hit the hardest. We can see that in all three countries, youth unemployment is quite a bit higher than regular unemployment.

But if we look at how much it's risen since 2022, we can see that only in the UK has the youth unemployment really risen much faster.

In Germany, It's pretty close to regular unemployment, and in the US, young workers have actually still done better than average since 2022.

That's kind of strange, given that AI was supposed to have taken so many entry level jobs.

So there's clearly more going on here.

In fact, we've identified three major trends that can help explain why you can't find a job anymore.

Yes, AI is still a factor, but it's more subtle than you think.

So let's get into it.

Here's how the rise of AI is actually impacting the job market.

One thing is for sure, many businesses are already using AI and many more are planning to introduce it.

In Germany, for example, about 27% of firms are actively using AI.

Another 80% is planning to use it and 34% is actively discussing it.

And only about 21% think it's not relevant.

These are very impressive numbers.

Just to illustrate how spectacular AI adoption percentages are. Have a look at this graph comparing personal AI adoption to people adopting, for example, personal computers in the 1980s or the internet in the 1990s.

This means that AI is the most rapidly adopted technology in human history.

Think about that.

So actually, it would be quite straight if we did not see any effect at all in the labor market.

But just because businesses are using AI, that by itself does not mean that it's costing jobs.

After all, companies could be using AI to replace people, but they could also be using it to make existing workers more productive.

To find out whether AI is getting people fired or not hired, at least, Stanford economists Erik Brynjolfsson, Bharat Chander and Raju Chen studied super detailed payroll data from occupations that were especially exposed to new AI models like software developers and customer service.

As you can see here, early career software developers who tended to support older coders by doing simple tasks rapidly, disappeared from companies after the launch of ChatGPT indicated by the vertical line.

However, more experienced coders kept being hired.

And as you can see here, the same trend can be seen in customer services.

After GPT, young people disappeared from customer service centers at a rapid pace while more experienced workers remained.

Meanwhile, young people in less exposed jobs like stock clerks working in warehouses and health aides did not see this massive drop in employment.

That is some pretty solid evidence that AI is absolutely impacting jobs, but only in certain sectors and in these sectors, it's the young, less experienced people that are indeed hurt more than their more experienced colleagues.

But of course, just looking at one study is not enough.

Another really interesting study was done by economists Hui, Reshef and Zhou.

Rather than looking at workers, they looked at freelancer jobs posted on the popular jobs market website Upwork.

Specifically, they studied two distinct AI waves.

First, they research how text based AI models like GPT affected writing based freelance jobs like copywriters.

And after that, they looked at how image models like Midjourney and DALL E affected the freelance job market for graphic designers.

Now, interestingly, they found a clear impact before the introduction of these models, which is the black vertical line, again, exposed and non-expert. Those jobs had a stable relation compared to each other.

And then after AI, there is a clear trend showing the number of jobs were exposed. Jobs declined rapidly compared to these non exposed jobs.

Combining these two studies, I think there's clear evidence that AI is already leading to some job losses where, given that it mostly affects less experienced people, this could indeed show up as less hiring, making it more difficult to find a job, especially for young people.

Unless AI is creating more jobs than it is destroying.

After all, in the past, new technologies have obliterated specific jobs very often.

But soon after, new jobs appeared to replace them.

For example, the invention of the printing press decimated the jobs market for scribes.

But at the same time it created jobs like book binding, publishing, and book selling.

The invention of digital technologies ruined the job market for switchboard operators, or so-called human computers, who did complex calculations by hand.

But over time, it created a lot of new jobs like programmer, web developer, and data scientist.

So is that the case today as well?

Yeah.

Probably somewhat.

A recent analysis by researcher Henley Wing Chiu on the US job market reveals that many of the jobs with the biggest declines were exactly those that AI affected the most. Computer graphics artist, photographer and writer.

On the other hand, the US job seeing the most increases last year was Machine Learning Engineer.

Sadly, his analysis only gives us percentages though, so it does not tell us exactly how many jobs were lost so that we cannot compare them to jobs gained.

In fact, I couldn't find any good research on this, but if I had to put my money on it, I bet that we are seeing both effects of AI right now.

It is making some workers more productive, but on average is also costing more jobs than it is creating.

But I think so far this effect is limited to sectors like graphic design and writing.

However, as you can see in this graph by the Economic Innovation group, unemployment for jobs that are super exposed to AI like the orange and blue lines is rising.

Absolutely.

But actually unemployment in less exposed jobs like the green and yellow lines is rising as well.

So I cannot fully explain why you cannot find a job right now.

To truly get to the bottom of why it's so difficult to find a job right now. We need to talk about a second major global development.

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That said, let's get back to explanation number two massive policy uncertainty.

Of course, this reason is mostly about one man.

Thank you everybody, and thank you to the media, the media has been terrific.

Believe it or not, I didn’t use- see?

I didn’t use the words fake news one time.

That's right.

Mr. Trump and his trade war so far has really been characterized by chaos and uncertainty.

Have a look at this fascinating graph by the Financial Times.

It shows that on average, Trump's proposed tariffs have been going up and down like crazy over the year.

Meanwhile, actual tariffs have slowly followed.

But crucially, businesses did not know that in advance.

It's well known that when governments swing between aggressive and unpredictable policies, affected businesses freeze, firms delay hiring, postpone investments and wait to see what rules they'll be operating under next.

And yes, we can actually see in the data that uncertainty is unusually high these days.

The so-called policy uncertainty index has exploded over the past year in both Europe and the United States, coinciding with Donald Trump taking office in January 2025.

Could this explain why companies are not hiring anymore?

All around the world, former economics Nobel Prize winner Paul Krugman argues that Trump's wildly erratic policies are in fact creating huge uncertainty, which is deterring many companies from hiring workers.

His main piece of evidence for this is that the number of long term unemployed has really surged since Liberation Day, the moment Trump announced his most dramatic tariff changes.

The second piece of evidence concerns Black workers whose unemployment rate has also climbed sharply after Liberation Day.

Historically, Black workers are among the first to be laid off and the last to be rehired in the US.

So rising uncertainty there is really a signal of broader problems.

For example, Germany's Ifo institute estimates that German manufacturing could shrink by about 2.8% because of them, with the automobile and pharmaceutical industries taking the hardest hits.

But Germany's uncertainty doesn't come from Trump alone.

It comes from China as well, where a massive industrial rise is hitting German industry especially hard.

In the less exposed countries, jobs don't seem to be under as much pressure yet.

The Netherlands, France, Spain and all of these countries, AI is playing a major role, but there's less uncertainty, and this could explain why unemployment is not yet rising as much in these countries.

Meanwhile, the UK is also less exposed to the trade war, but their businesses have indicated they are mostly concerned about uncertainty from its own government that is, struggling to provide clarity on how much it will raise taxes, how much it will increase the minimum wage and increase the national insurance contributions that these firms have to pay.

However, whether it's about the US, China or UK uncertainty, there's one big problem with the uncertainty explanation in general; the timing.

If we look at the falling hiring trend over a couple of years, it just doesn't match up.

Jobs are decreasing ever since 2022, and in turn they only really became extreme in 2025.

Therefore, to fully understand why it's so difficult to find a job right now, we need to talk about our final explanation, which is the unwinding of the Covid economy.

You see, one thing I’m missing in the current media landscape, and that I hope to address with this channel, is that a truly long term macroeconomic perspective.

Yes, as we have seen, unemployment is rising.

But what happens if we zoom out a couple of decades?

Then you get this picture in the US, you get this picture in the UK and you get this picture in Germany.

Now, if we draw a line on these graphs, we can see that unemployment is still well under- or maybe in the case of the UK, near to its long term historical average.

On top of that, two things really stand out to me. If I look at these pictures.

The first is that unemployment comes and goes in cycles.

And the second is that unemployment was really exceptionally low right before and after Covid.

This was the period of the Great resignation, where jobs were so available that people were able to leave abusive bosses and underpaid jobs and move to better paid positions.

That actually sounds like the way the job market should always be, doesn't it?

So what ended this period?

Well, I think the most plausible explanation is the end of high government stimulus and ultra low interest rates.

Governments are now worried again about that.

And central banks have increased interest rates.

As a result, less money is circulating in most economies and as a result of that, there just now aren't as many jobs as there used to be.

So to get back to our original question, is it really that difficult to find a job right now, especially for young people, like we're seeing in these TikToks?

Yes, absolutely.

At least when you compare it to just three years ago, this can partially be explained by AI sure, and some geopolitical uncertainty.

Sure.

But historically speaking, sadly, it looks like what we've seen so far is really simply an return to normality.

That can be explained almost completely by the end of Covid stimulus.

So will this situation get better or worse?

Well, we can never know for sure.

On the optimistic side, we have seen in the past that technologies have actually created more jobs, Sometimes.

It took time for these to develop though, so I do think there is good reason to be hopeful that we haven't seen some of these more subtle benefits of AI yet.

But honestly, my expectation is that geopolitical uncertainty will only get worse as we enter a multipolar world order.

On top of that, AI adoption will likely first lead to more job losses.

And with government debt so high and societies quickly aging, I certainly think it's unlikely we will see more government stimulus on the level as we saw during Covid again soon.

So I think it's unlikely that the job market will get much better soon.

But yeah, what do you think?

Let me know in the comments below.

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