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Conversations with the Fed: Decoding Today’s Confounding Labor Market

October 1, 2026 | 11:00–11:45 a.m. CT
Virtual video event
Jeff Horwich
Jeff HorwichSenior Economics Writer
Amanda Michaud
Amanda MichaudPrincipal Research Economist, Institute
Simon Mongey
Simon MongeyMonetary Advisor
Conversations with the Fed: Decoding Today’s Confounding Labor Market

Amid downbeat news stories, gloomy worker surveys, and the omnipresent cloud of AI, where are economists and policymakers finding their confidence in the U.S. labor market? It’s a story much deeper than the unemployment rate, which has hardly moved in more than two years of “low hire, low fire” conditions.

In this 45-minute discussion, Minneapolis Fed labor economists Amanda Michaud and Simon Mongey  take on audience questions and articulate the in-depth case for a broadly balanced labor market. They find ample support in the data for optimism and positive momentum, while noting limited real wage gains and possible downside risks.

Event Details

Virtual video event

Summary

In conversation with Senior Economics Writer Jeff Horwich, Michaud and Mongey share how:

  • A focused view of layoffs and quits to nonemployment signals worker resilience and confidence.
  • After COVID-19 turmoil, the labor market appears to be normalizing to a pre-pandemic state, while a bulge in pandemic-era hires helps explain low quits overall.
  • Hiring appears to be broadening to sensitive sectors, while low layoffs suggest employers are hoarding workers in expectation of good times ahead.
  • The rise in unemployment among new college graduates is largely a supply story, with a surge in degree holders in recent years.
  • Evidence of AI-driven job loss is missing so far; if anything, research at the firm and worker level finds employment and wages rising at firms adopting AI.
  • One labor market challenge could be “congestion” as many workers simultaneously seek to retrain for the AI economy.
  • At a time of elevated inflation, productivity growth has not passed through much to real wages, which likely contributes to current angst felt by workers.
  • Shrinking labor force and signs like the recent decline of the Black unemployment rate point to a “warming” job market that could help lift wages going forward.

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