Derek Thompson

So this theory is essentially the economy can't catch a breath.

Yes, GDP continues to grow between whatever, 1.5 and 2.5% every single year,

But fundamentally, this is an economy where employers feel like they're hanging on by the skin of their teeth.

And as a result, they're not hiring, right?

So that's explanation number two.

The last point that I want to make here is that there are some viral graphs floating around the discourse that show that the hiring rate started to decline linearly the same quarter that ChatGPT was released in November of 2022.

And the problem with 2022 is that unfortunately, for the purposes of economists and economic writers trying to explain the world, ChatGPT's release was not the only thing that happened in 2022.

Exactly.

You also had this turnover between the age of the great resignation and the age of essentially the great, what you call the big freeze.

From everyone is quitting and leaving and getting rehired to companies are saying, no, we're going to try to make do with the labor force that we have.

That's the first thing that happens.

The second that happens in 2022 is the Federal Reserve starts jacking up interest rates.

And what the Fed is trying to do here is to cool off demand.

One way you cool off demand is by discouraging companies, you know, constantly hiring employees from each other and, you know, driving up wage growth.

So a lot of stuff was happening around the same time here, which complicates the theory, the convenient and easy and crisp theory.

Oh, all this mayhem started just around the same time that ChatGPT came out.

Therefore, it's an AI phenomenon.

Unfortunately, for our purposes, AI is not the only thing that happens in the world.

Inflation happens in the world.

The Federal Reserve happens in the world.