Who should new grads boo more? AI or remote work?

0:01Vito Emanuel:NPR.

0:11Sierra Juarez:This is the indicator from Planet Money, also known as the 2026 Ambie Award winning Best Business Podcast. I'm Adrian Ma. I'm Darian Woods. And I'm Waylon Wong. And it is Jobs Friday. It's the day each month where we look at the latest government jobs report and we check in with how American workers are doing. That is right. And according to the latest report from the Bureau of Labor Statistics, the unemployment rate in May remained at 4.3 percent. So same as the past couple of months. And employers added 172 ,000 jobs.

0:44Stacey Vanek Smith:That's a pretty good number overall. And, you know, this is the third month in a row that employers have added a decent number of jobs. That's true. But we always like to dig beneath the headline numbers and add some detail to the picture.

0:58Sierra Juarez:Computer, enhance. So after the break, we'll explain what is driving job growth right now.

1:04Stacey Vanek Smith:Whether AI is really to blame for young people struggling to land their first job. And how the unemployment rate for black workers could be a signal of what's to come.

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1:53Vito Emanuel:Dell.com slash Dell-Pro. Built for you. This message comes from Fisher Investments. Senior Vice President Michael Hosmar shares one way their fiduciary duty comes to life when working with clients. We listen to our clients' goals, their objectives, their personal needs, and we build a plan that puts their needs first. They want to know what we're truly thinking about and how that thinking is being built into our plan for them, because that's how seriously we take our fiduciary responsibility. Learn more at FisherInvestments.com. Investing in securities involves the risk of loss.

2:30Stacey Vanek Smith:We're looking at this month's jobs report. Why don't you kick us off, Adrian Ma?

2:34Sierra Juarez:So like we said, May was a strong month for jobs. 172 ,000 jobs added. And in fact, this latest report includes some revised estimates for the months of March and April. They were revised upwards as the BLS got more data. And between those two months, that means employers added 93 ,000 more jobs than was previously reported. And that's on top of what were already strong hiring numbers. All right. So we've got three months in a row of strong hiring. So maybe, perhaps, the labor market is starting to shake off this low hire, low fire sluggishness we've been seeing for a lot of the past year. That could be.

3:14Sierra Juarez:And a couple more interesting notes from this report. It says most of the jobs added last month were in the leisure and hospitality sector, local government, and health care. And the average hourly wage was$37.53 an hour. That is 3.4 % higher than a year ago, but not quite enough to keep up with inflation, which recently clocked in at 3.8%.

3:39Stacey Vanek Smith:So this Shops report has made me think that it's going to be pretty unlikely that the Federal Reserve is going to decide to cut interest rates in the near future. I mean, this is a good point, right?

3:50Sierra Juarez:Because as we know, President Trump has been jawboning the Fed to lower interest rates to try and juice the economy. But the job market is gaining steam and inflation, rising prices for gas, groceries and other things. That's really the growing concern right now. and the Fed cutting interest rates would just add to inflation. So in this environment, the case for an interest rate cut makes even less sense. And some economists might even see cause for a rate hike. Interesting environment for a new Fed chair to be stepping in. Thank you for that, Adrian. And now we're going to dive into some specific groups, Jerry and Woods.

4:28Stacey Vanek Smith:I was particularly interested in the unemployment rate for younger workers. Right. A lot of young people have just graduated from trade school or college. So this is going to be what they're obsessed with right now.

4:40Sierra Juarez:And what their parents are probably going to be thinking about.

4:42Stacey Vanek Smith:Yeah. So those parents will be relieved because the jobs report showed that the unemployment rate of Americans aged 20 to 24 decreased a little to 7.2 percent in May. Now, historically, that's kind of average, but it doesn't include all of the people who think that the jobs market is so bad that they're just going to go back to school. Younger people have been feeling frustrated about the jobs market for a few years now.

5:09Sierra Juarez:I mean, judging by the sort of viral clips of commencement speeches, you would think that this is all because of AI being the big villain here.

5:18Stacey Vanek Smith:Yeah, here's former Google CEO Eric Schmidt speaking at the University of Arizona.

5:22Vito Emanuel:Time magazine selected its person of the year for 2025. And this time, it was the architects of artificial intelligence. Interesting.

5:36So today we stand on this video. Oh man, they're just really not having it.

5:40Stacey Vanek Smith:They are not. And there has been a smattering of research over the last year supporting those boos. It says AI is to blame for low hiring rates for junior workers. Eric Schmidt should have pivoted and started just reading out those studies. He could have gotten the crowd back on his side. Well, what he needed were two new studies which are casting doubt on the AI theory. They have accused another big force for the death of junior hires, remote work. Oh, okay. That's interesting. So this predates the whole AI boom. It does, but it's actually very similarly timed as people kind of figured out that remote work did have some friction in the gears of running a business.

6:25Stacey Vanek Smith:So the first paper from two economists in the UK looked at hundreds of millions of hires and jobs postings all across the US and other countries from 2017 to 2035. Now, they couldn't find much evidence that AI was killing that many junior jobs, even in tech. But what they did find was that jobs that were more likely to have remote workers were less likely to hire people with limited experience. And the second paper was from three economists in the U.S. In findings released this week, they conclude that nearly two-thirds of the recent rise in unemployment among young college graduates is because of remote work.

7:06Sierra Juarez:So employers are basically telling Gen Z, like, no thanks. Don't worry about applying.

7:12Stacey Vanek Smith:Gen Z need not apply. The idea is that onboarding is much harder in a remote work world. And so hiring managers are leaning towards getting people that already know the workplace basics. They know the on-the-job skills and how to communicate with others, being proactive, all that stuff that face-to-face makes easier. I do see that rationale. I also think that if you take the time now to train Gen Zers about how to do this kind of work, you know, there could be a payoff later that maybe employers aren't thinking of. Absolutely. And training seems to be easier face to face. Could you use AI to train?

7:51Stacey Vanek Smith:Maybe AI is the savior. OK.

7:54Sierra Juarez:Let's revisit this in five years. Thank you, Darian, for that bit of insight into younger workers. Waylon, why don't you go next? OK, I am here to talk about another area of concern that could potentially signal trouble for the broader labor market, and that is black workers. This is a group where their unemployment rate has historically been higher than the main number. And this was definitely the case in May. The jobless rate for black workers was 6.6 percent compared with 4.3 percent for all workers. That said, the 6.6 percent number is an improvement. It's down from April and it's the lowest rate in a year.

8:30Sierra Juarez:So hopefully it keeps moving in that direction. Yeah, and black women in particular really felt the effects of the mass layoffs and buyouts we saw with the federal workforce last year. I read an analysis from the Economic Policy Institute. That's a think tank that advocates for low and middle income working families. And the EPI says that black women suffered the greatest job losses in 2025. Its analysis also shows that the overall net loss was driven entirely by cuts in public sector jobs.

8:58Stacey Vanek Smith:I wonder whether some of these federal workers finding new jobs might be why the black unemployment rate went down. Yeah, it's encouraging data. But, you know, if the black unemployment rate were to go back up, that could be a bad signal. There was some other research that caught my eye recently. It comes from Kevin Rins, an economist at the Cleveland Fed. And he determined that when the unemployment rate for black workers goes up, it tends to be followed by higher overall unemployment. Right.

9:27Sierra Juarez:So that's what they call a leading indicator. Yeah. According to his analysis, if the black unemployment rate goes up one percentage point, you can expect the overall unemployment rate to go up about 0.2 percentage points in four to seven months.

9:42Stacey Vanek Smith:That's super interesting. We hear about recession indicators all the time. And this one going back to basics, the unemployment rate for black workers seems like it has some empirical backing to it. Absolutely. Yeah. Just back to basics.

10:00Stacey Vanek Smith:This episode was produced by Corey Bridges with engineering by Robert Rodriguez. It was fact-checked by Sierra Juarez and Vito Emanuel. Kate Kincannon edits the show, and The Indicator is a production of NPR.

10:21Vito Emanuel:This week on Consider This, the drama at CBS News. Some of the most respected journalists in America say their corporate ownership is bowing to political pressure. It's intimidation. They've created a climate of fear to make the news organization unwilling to tackle the problem and report the news. Longtime 60 Minutes correspondent Steve Croft this week on Consider This. Listen on the NPR app or wherever you get your podcasts.