BLS Chief Fired Over Jobs Report & Top 10 Jobs Safe From AI

0:28This episode is brought to you by Progressive Insurance.

0:33Good morning, Brew Daily Show. I'm Neil Freiman. And I'm Toby Howell. Today, a jobs report shocker showed the economy is slowing down for real. Then how did Switzerland end up with one of the highest tariff rates in the world? It's Monday, August 4th. Let's ride.

0:53Good morning and happy Monday. The hottest ticket in New York this weekend wasn't to a new Broadway show or an act at MSG. It was to a game featuring the Brooklyn Cyclones in the Jersey Shore Blue Claws. Yeah, that's right. A high A baseball game. The fourth tier of competitive baseball in the U.S. was a sellout affair Saturday night because it was also Seinfeld night. The 10th iteration of the event saw fans receive Kramer bobbleheads and featured an always entertaining Elaine dance contest. It also featured some boots on the ground reporting from our very own Neil Freiman. Neil, you went to the game.

1:27What was your experience like? Yeah, I went down to Coney Island and yada, yada, yada. Now I have a back tattoo. No, Seinfeld night did absolutely live up to the hype. The first thing I have to know is the bobblehead frenzy. It is real. People were lining up for a minor league baseball game up to two hours early in order to get this Kramer bobblehead. As soon as I got mine, some guy came over five seconds later and was like, you want to sell that? Here's$20. I was like, no way. Get out of here. After the game, we checked eBay, and it's now up to$70. So I'm glad I kept the bobblehead. And the Elaine Dance Contest was absolutely incredible.

2:04I mean, I've never stayed for a minor league game past the seventh inning. And they staged the dance contest at the end of the game. Everyone stayed. The competitors were fantastic. So I highly recommend going next year. And now a word from our sponsor, LinkedIn ads. Neil, when's the last time you felt like you really wasted something? Oh man, I lost a whole day to this awful party in February, completely wasted by whole evening. You mean my birthday? You know what's the worst thing to waste though? Marketing spend. It wastes time, money, resources, effort. The list goes on. LinkedIn ads can help reduce all that waste.

2:40Good save there, buddy. LinkedIn ads lets you target by job title, industry, company, and more. With over 130 million decision makers and 10 million plus C-suite execs, aka the people you need for your business. So rather than being part of the 71 % of B2B ads that are a waste of money, get zero attention, make zero sales. Or waste invites to birthday parties. Oh my God, move on. LinkedIn will even give you a$100 credit on your next campaign so you can try it for yourself. Just go to linkedin.com slash mbd. That's linkedin.com slash mbd. Terms and conditions apply only on LinkedIn ads. After three months of calm, markets are rattled entering the first week of August, and that's because of some shocking developments from Friday.

3:24First, the July jobs report was an absolute stinker. The economy added just 73 ,000 jobs last month, way lower than expectations, revealing a labor market that's rapidly slowing down. And that wasn't even the most concerning part. The jobs reports for the previous two months, June and May, were revised downward by nearly 260 ,000 jobs combined. So given those revisions, employment growth averaged 35 ,000 in the last three months, the slowest job growth since 2010 outside of the pandemic. If you've been finding it hard to land a job, now you know why. If the rough jobs report was the shot, here's the chaser.

4:00President Trump, when faced with bad economic news, shot the messenger, saying without any evidence that the Bureau of Labor Statistics fudged the numbers to make him look bad, Trump sacked the agency's commissioner, Erica McIntyre, for a longtime government vet who served under administrations of both parties. Banks like Morgan Stanley, an economist of both the right and the left, said the firing was something you'd see in a banana republic and damages the integrity of U.S. economic data, the most important statistics in the world. William Beach, who ran the BLS during Trump's first term, called the firing, quote, totally groundless and setting a dangerous precedent.

4:34After the chaotic morning, the S &P 500 failed to close out its worst week since April. Yeah, whenever you see a revision come down the pipeline of that size, it does set off a few warning bells. But revisions are pretty common. Whenever you're trying to measure something as big and as dynamic as the U.S. labor market, you're going to run into unavoidable tradeoffs between doing it in a timely fashion and doing it as precise as possible. The way that these reports are created is that you go out, you ask businesses, businesses respond, but not every business responds in time. So what you do as a government statistician, you go in and fill in the gaps.

5:13You use a statistical technique that basically assumes that the businesses that didn't respond would respond in a way similar to the ones that did. But as you go back and comb through the data as more of those responses come in, you do end up with these semi-large revisions. So they are pretty common, but negative revisions can be a warning sign because you don't necessarily want there to be a massive delta between what you reported and what you revised to. All that being said, a lot of economists on both sides of the aisle were saying that we do not want to see, as you said, the messenger being shot here because the data is largely accurate and you don't want the person responsible for reporting that data to be the one that takes the brunt of the badness.

5:54Yeah, well, William Beach, who ran the BLS in Trump's first term, said it's not even possible for the commissioner to cook the data, cook the books. And that's because they don't see the report, which has been compiled by bureaucrats over the course of the month until two days before. And their main job is to liven up the text so that when people like us or other economists are reading the jobs report, it's not the most dry thing in the world. So they just edit the text. There's very little ability for them to go in and fudge a number here and there. And that's why you saw economists and banks come out and say, well, this is something that you'd see in China, Argentina or Greece ahead of their debt crisis, because it certainly undermines the integrity of the data that is not only used by the public sector, like Federal Reserve Jerome Powell on figuring out when to cut interest rates because of inflation or employment, but also like the private sector relies on government data so much in order to make new investments or open a new location somewhere.

6:51So that is why economists called this a four alarm fire. Let's just zoom out to last week because we called this this big economic gauntlet of data that was dropping. And it painted a picture of some mounting economic pressure because earlier in the week we saw data that show hiring rate fell to a seven-month low. And then also the quits rate, which is a pretty good proxy for worker confidence, that dropped to just 2%. Then we got that GDP data that had overall strong numbers. But when you looked into the actual details, it belied some underlying softness, mainly with the fact that sales to private domestic purchasers, which is, again, a proxy for consumer and business demand, that fell to its weakest pace since 2022.

7:35And then the Fed's preferred inflation gauge, the PC index, showed price increases were accelerating in June. And then everything culminated with that no good, very lousy jobs report. So you do have some softening economic growth here. You do have inflation ticking up a little bit and you have a weakening job market, which puts Jerome Powell's decision to hold rates steady into a little bit of a different light now. Maybe we'll look back on that and say, was it was he too late with cutting rates? Is the job market really softer than we were expecting? Those are the questions that we're going to have until the next Fed meeting.

8:10Yeah, some very stark statistics here because there's really one industry holding up the job market and making it in the green at all, which is health care. Without health care job growth, the last three months of payroll gains are all negative. Negative 53 ,000 in May, negative 45 ,000 in June and negative 300 in July. So outside of the health care industry, job growth really is anemic. And that's why investors are now betting on a rate cut in September. There was 40 % chance that Powell would cut rates in September. Earlier in the week after the jobs report, that number shot up to 91 % chance we'll get a lower rate cut.

8:46Let's move on. Switzerland is not often a country that makes a lot of headlines unless you're unusually plugged into the chocolate or watch business. But suddenly they've been thrust to the forefront of the global trade war after President Trump's shocking decision to levy a 39 % import tariff against Swiss goods, one of the highest rates in the world. The Swiss were completely caught off guard by the announcement last week, expecting a deal much closer to that of the European Union, who got a baseline tariff of between 10 and 15%. Swiss markets were closed on Friday because of a national holiday, so the fallout hasn't hit in full yet, but the London-listed company watches of Switzerland fell nearly 10 % after the rate was announced, showing that companies listed on the Swiss exchange, companies like Novartis, Roche, and Nestle, could be in for a rough go of it today.

9:35Switzerland's economy is particularly exposed to these tariffs because the U.S. is its top destination for exports, with around a sixth of Switzerland's goods finding its way to the U.S. Its biggest industry is pharmaceuticals, which could be exempt from the 39 % tariff, but is facing down criticism within Switzerland for sparking the ire of Trump. Some Swiss watchmaking execs, for instance, said their country was being, quote, held hostage by the pharma industry that had irritated Trump with their high drug prices. Neil, there is still time to make a deal before the August 7th implementation deadline of these tariffs.

10:09But the odd combination of an outsized trade deficit with the U.S. and the inability to strike a, quote, big deal that Trump so enjoys condemns Switzerland to an extremely punitive tariff rate. They are absolutely freaking out over there. Only Laos, Myanmar, and Syria of any countries in the world had a higher tariff than Switzerland. Those had tariffs at 40 to 41 percent. Switzerland at 39%. The tabloids are calling it Switzerland's greatest defeat since 1515 when it lost a battle against the French. So the knives are out. They are going after the president and figuring out what the hell they did during these negotiations to get a tariff rate that is so much higher than the European Union at 15%.

10:52It puts them at a massive disadvantage against their peers across Europe. UK has a 10 % tariff. So something happened here in the negotiations that drew Trump's hatred or anger against the Swiss and chocolate makers, pharmaceutical companies, and watchmakers are looking at a 39 % tariff. And they're saying, well, we're going to be at a huge disadvantage. Yeah, Trump sees trade deficits, which is when a country sells more to the U.S. than it buys, as a problem for the United States. Inherently, it's a very black and white view in his mind. So he looks at the Swiss trade deficit in the U.S. last year.

11:28It was nearly$50 billion. But if you actually toss in services, it drops down to$20 billion or$22 billion. So he looks at that and says, oh, they need to be buying more of our goods than we are buying of their goods. But then a lot of people within Switzerland saying, dude, we are a country of 9 million people. The U.S. has over 300 million people. Even if we all bought Harley Davidson's, even if we all bought bourbon, even if we all bought steak every single day, we could never close the goods gap simply because of our size. And they also point to the fact that we have set out and made these pledges that Trump so likes to see.

12:02Switzerland was looking in the range of an$150 billion investment pledge, which is one of the biggest relative to the size of its country. So they're saying, hey, like we're doing everything we can. We're just a small country. So it's very hard to close that gap with the U.S. So they still have until August 7th in order to hopefully make an emergency deal for them. Maybe they'll send in Roger Federer as an emergency trade emissary. Moving on, NFL Red Zone is famous for bringing fans seven hours of commercial-free football, but now ESPN is stepping in to bring fans that sacred offering. According to The Athletic, the NFL and ESPN reportedly agreed to a blockbuster deal on Friday that would send many of the league's top media properties over to the worldwide leader in sports in exchange for equity in ESPN.

12:48That means ESPN would get access to Red Zone, aka Football Nirvana, as well as the NFL Network, seven more regular season games in the league's fantasy football business. The NFL would get up to 10 % of equity in ESPN, an agreement potentially worth billions of dollars. The timing of the deal lines up with ESPN's plans to roll out its standalone streaming platform later this fall. There's no exact launch date yet for the service, which will just be called ESPN, but it's coming soon and would be bolstered by this latest pact as ESPN tries to entice cable cutters to sign up for the$30 a month streamer.

13:22Neil, there is still a long way to go before this deal actually becomes reality, mainly because it would also need the blessing of regulators, which could take up to a year. But if regulators do sign off, the deal would take effect next season, lining up with a huge moment for ESPN when it would also air its first Super Bowl. Yeah, pretty interesting deal here because ESPN and Disney, its parent company, are kind of zigging where other companies are zagging in their same space. Warner Brothers and Comcast, their big moves recently has been to shed cable networks because they are in a no-growth business, which is what CEO Bob Iger said just two years ago.

14:01So the fact that they are acquiring a cable network from the NFL, a cable network that is flailing and not doing so well, speaks to the power of the NFL and the fact that it is the most valuable media property in the country, perhaps in the world. So that's why ESPN is making this deal. It wants more tentacles in the NFL, and it also wants to bolster this streaming service, $30 a month coming in a few weeks. Ironically, even though the NFL is just this absolute ratings juggernaut, it's media properties. The show it puts on to talk about the NFL kind of stink and never really got off the ground.

14:36They've been trying to make this work. NFL Network was started back in 2003, but just never really gained the foothold they are looking at. So maybe they think that ESPN will do better, kind of running it as a sub network under their main sports brand. But a lot of fans have been calling out the fact that this is definitely a conflict of interest. Some people said like, hey, would ESPN do the same level of in-depth reporting on a critical story to the NFL if the NFL has a meaningful ownership stake in the company? That could blur the line of objectivity and independence. Call it the separation of church and state.

15:08Now they are under the same umbrella here. So it seems like a win-win for both the NFL and ESPN, but fans could be the ones that are losing here because of that blurring line. Up next, let's talk about our winners of the weekend. You know what's even harder than waking up at 4 in the morning? Trying to start up a new business. Don't I know it. I've been cooking on this pickleball shoe idea for two years now. It ain't for the faint of heart. That's why finding the right tools to help you build and simplify every process along the way can be a huge game changer. For millions of businesses, that tool is Shopify.

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16:56Terms and more at applecard.com. Welcome to Winners of the Weekend, the segment where Toby and I picked two things that partied in Bushwick until sunrise. I won the pre-show junior mint toss, so I get to go first. And my winner is dredge operators, because you folks are most likely to still have a job when the rest of us are replaced by AI. A new Microsoft report examined which jobs were most vulnerable to AI based on how much AI is currently being used for that kind of work and how effective it is at those tasks. The list created send a clear message. The jobs least likely to be impacted by AI were blue collar physical labor roles like dredge operators, rail track layers, loggers, sanders, motorboat drivers, and other positions that require both your brains and your hands.

17:41All the jobs most at risk involve just your brain. The most vulnerable position was interpreters and translators, followed by historians, passenger attendants, sales and customer service reps, and writers and authors. Microsoft stressed that it wasn't creating a list of jobs that will definitively be replaced. Instead, analyzing a job's tasks that are most closely aligned with a large language model's current skills. Still, at a time when CEOs are openly bragging about lowering headcount and costs after introducing AI, it's easy to see which sectors of the economy mass jobs cuts could come from, and it's coming for the desk jobs, not the plumbers.

18:16Yeah, this was to be expected. Of course, blue-collar jobs are gonna have kind of a new sheen to them, a new allure because they can't be replaced by AI in its current iteration. But I do want to dig into the methodology of this report a little bit more. They were looking at work activities that generative AI was either completing or providing instructions for. And that latter is kind of an interesting development with how AI is being used. A lot of workers sometimes ask them, ask these AI apps to complete a task for me, like write this email. But most of them are using them as coaches or sounding boards, figuring out the most effective way to do that job.

18:53And that's something I think is reflected in some of my friends that I've talked to is like they use it to, if you have to fire a worker or something like that, they use it as a sounding board to bounce ideas off of, not necessarily like, hey, fire this worker. That's not something that you can actually have an LLM do. So even though, yes, the big headline takeaway here is that blue collar jobs are obviously not at risk to being replaced by AI. The sub headline too was just how interesting white collar workers are actually using AI. My sub-sub headline is that the importance of getting a degree could be vanishing very quickly because according to Microsoft, they said in terms of education requirements, we find higher AI applicability for occupations requiring a bachelor's degree than occupations with lower requirements.

19:38So if you go down the list of the jobs that are most vulnerable to AI, nearly all of them require a bachelor's degree or perhaps even a graduate degree, while the ones that are least vulnerable require maybe, you know, they are a skilled job, but they don't require you going to school for so long. So if I'm a college or higher educational institution looking at this, I'm thinking I might have to revamp my pitch or my value prop to incoming students to say, you know, we are going to prepare you for the AI economy, because right now it looks like we are preparing you to get your job replaced. My winner of the weekend is Matt Dietke, because this little known AI researcher is earning money that neither Steph Curry or J.

20:16Robert Oppenheimer can wrap their heads around. Meta recently offered D.F.K. $250 million over four years, good for an average of$62.5 million a year. To put that into context, Steph Curry's most recent four-year deal with the Golden State Warriors is worth$35 million less than what D.F.K., who is not the greatest shooter of all time, is getting paid. Even the greatest tech and science achievements of our time haven't warranted salaries even close to what AI engineers are getting paid right now. Thomas Watson Sr., the legendary CEO of IBM, received the third highest salary in America during his time, leading the 20th century's most dominant tech company.

20:54His salary was worth just$12 million a year in today's dollars, less than a sixth of what D.I.K. is raking in. Zoom out to one of the greatest collective research undertakings in world history, and you still don't sniff AI numbers. J. Robert Oppenheimer, who led something called the Manhattan Project, earned approximately$190 ,000 in today's dollars. D &K, who is 24, I might add, is set to earn 327 times what Oppenheimer made while developing the atomic bomb. Rather than alter the course of human history, D &K created a startup that makes models good at juggling images, sound, and text. But the big tech companies doling out these salaries do think the race to achieve artificial general intelligence can alter the course of human history and make potentially trillions of dollars in the process.

21:42So they are betting that these pay packages will end up being justified. Still, Neil, it's hard to fathom salaries of this size. There is simply no historical context, even when you get into the upper echelons of athletics in science. Ars Technica said his compensation shattered every historical precedent for scientific and technical compensation we can find on record. Just look at Neil Armstrong. Did something pretty impressive, pretty amazing scientific or technical achievement by becoming the first person to walk on the moon. His annual salary was$244 ,000 in today's money. So Meta's new AI researcher, this 24-year-old guy, is going to make more in three days than Armstrong made in a year for taking that one giant leap for mankind.

22:28The reason they're getting all of this money is because Zuckerberg thinks that these guys who are able to manipulate, you know, teach AI to learn how to address images and text will be a civilization-altering scientific breakthrough, which is, and there's just not many of them. In order to become a good AI researcher, you need a ton of computing power. There's only so many labs or places around the world where you're able to access that computing power. So it's a very small group of people, very specialized group of people, and they're commanding insane salaries. It's Monday, so here are the big events you need to know to stay ahead in the week ahead.

23:06Earnings season rolls on with some intriguing reports from every sector of the economy. Disney, Uber, and McDonald's will tell us the health of the American consumer. AMD and Supermicro are a key test for the AI revolution. And Eli Lilly and Novo Nordis will discuss whether the boom in weight loss drugs still has legs. But the most closely watched report may be this afternoon with Palantir, the AI software giant that has soared over 100 % so far in 2025 to become one of the top 20 most valuable public companies. I'm looking forward to the drug makers gauntlet, honestly, because Nova Nordic has obviously fallen off a cliff recently.

23:41Curious to see also how drug makers are thinking about tariff exemptions too. And then I just tried the snack wrap from McDonald's. I know I'm a little late on this. I did it yesterday and it was good. So I am curious to see if McDonald's get a little bump, although I did have stomach issues later in the day. Maybe that will affect the earnings. Maybe it won't. I hate to be the bearer of bad news, but back to school week shopping kicks off for real this week. According to the National Retail Federation, parents of children in kindergarten through high school are budgeting an average of $858 for spending on things like electronics, clothes, pens, and books this year so their kids can have the spiffiest three-ring binder in homeroom.

24:19If there's a silver lining to back to school is that states are rolling out sales tax holidays this month that could shave a few bucks off target haul so be sure to look up when your state is giving your wallet a break yeah both those sales tax breaks are coming but also walmart and target they're freezing or lowering their prices as well because kpmg did this kind of consumer survey and they found that more than half of shoppers said they plan to buy less overall this back to school season because of tariff. So a lot of factors are going on where you have one side of states and retailers trying to lure those back to school shoppers out and then back to school shoppers saying, hey, we're not buying because we're afraid of tariff.

24:57So we'll see kind of which side wins out. What was your favorite school supply to get? I well, I loved the pens and the pencils. I love mechanical pencils. So that was like a big deal to get like the best ones. And then whatever those notepads with the shiny like covers on them were that you could kind of scratch and make a noise. I don't even know what they're called, but that's what leaves a lasting impression in my mind. I feel like you were a binder guy though. I did love a binder. I mean, the thing I remember most about back to school shopping is I would get all of this new fancy stuff that I was super excited about and then I would never use it.