Goldman Sachs economist Pierfrancesco Mei wrote on Thursday that “finding a job takes longer in a low-turnover labor market.” He argued that “job reallocation,” or the pace at which new jobs are created and existing ones destroyed, has been on the decline since the late 1990s, albeit more slowly as of late. Almost all job changes between existing jobs is taking place as “churn,” driving “almost all the variation in turnover since the Great Recession.” Goldman found that as of 2025, churn was well below its pre-pandemic levels, a “broad-based” pattern across industries and states, and this “mostly fall[s] on younger workers.” In 2019, it took a young unemployed worker about 10 weeks to find a new job in a low-churn state, now that’s 12 weeks on average.
UBS’ Donovan writes that “it might be tempting to blame technology” for the plight of the Gen Z would-be entry-level worker. “Machines, robots, or computers replacing humans is an ever-popular dystopian scenario.” Donovan concludes, similarly to Goldman that the U.S. pattern “more convincingly fits a broader hiring freeze narrative, affecting new entrants to the workforce.”
“The overall job finding rate is very, very low,” Powell said. “If layoffs begin to rise, there won’t be a lot of hiring going on.” The AI question remains open, in the Fed chair’s words. Saying “there’s great uncertainty” around how big an impact AI is having, he offered a perspective, almost a guess, that “you are seeing some effects [from AI], but it’s not the main, not the main thing driving” the youth unemployment picture. Still, “there may be something there. It may be that companies or other institutions that have been hiring younger people right out of college are able to use AI that more than they had in the past. That may be part of the story … Hard to say how big it is.”
