AI's Rise Stirs Excitement, Sparks job Worries

Economic

Summary:

The transformative effects of artificial intelligence dominated discussions at the Reuters NEXT conference in New York, with panelists concentrating on how it may upend work - and job growth - sidestepping concerns about an AI bubble.

Artificial intelligence represents the biggest technological upheaval to the world economy since the rise of the internet a quarter-century ago. It has brought trillions of dollars of investment and dizzying stock-market gains, but also a shortage of memory chips, regulatory scrutiny, and rising anxiety about job displacement.

The numbers are ‌eye-popping. In the first half of 2025, AI-related capital expenditures contributed more to GDP growth than the consumer, according to JP Morgan Asset Management. Investment advisory Bespoke Investment Group recently estimated about one-third of the rise in global market cap since the introduction ‌of AI assistant ChatGPT comes from 28 AI-related companies.

Corporate executives at Reuters NEXT largely focused on how AI would transform work, though some talked about the threat to jobs. "All (of our customers) are focused on slowing headcount growth," said May Habib, CEO and co-founder of AI startup Writer. "This has happened just in the last few weeks. You close a customer, you get on the phone with the CEO to kick off the project, and it's like, 'Great, how soon can I whack 30% of my team?'"

FEARS OF JOB UPHEAVAL

The fears about job displacement brought on by the AI boom are backed by a U.S. Federal Reserve report noting data and surveys ⁠that say artificial intelligence is already replacing entry-level positions and causing companies ‌to trim hiring plans. An August Reuters/Ipsos poll showed 71% were concerned AI will be "putting too many people out of work permanently."

Striking a more optimistic tone that became one theme of the Reuters NEXT conference, economist Joseph Lavorgna, counselor to the U.S. Treasury secretary, said the focus should be on how the technology could ‍enhance labor rather than replace it. “AI is an incredible tool that I think is complementary to the existing workforce,” he said. “We need policies that are going to encourage businesses to invest, and AI is a complement to it.”

Nevertheless, employment data is hard to ignore. Recent college graduates have seen a sharp rise in unemployment, with a current jobless rate of 9.5% for those between 20 and 24 with a bachelor's degree, according to the U.S. Labor Department, compared with the nation's 4.4% rate.

Joe Depa, EY chief innovation officer, likened the changes to previous tech upheavals like the development of the internet, but “the difference this time is that the disruption is ‌faster.” Depa said “adaptability is the new job security,” with his biggest worry around the middle management class.

Tracey Franklin, Moderna's chief people and digital technology officer, said what has changed is how companies are starting to evaluate employment needs in tandem with technological needs, rather than separately.

“We're pooling teams together and really looking at, what is their IT portfolio, what is their human capital strategy, how do we pull that together to meet their business objectives. So we're having these integrated conversations we didn't have before,” she said.

SKEPTICISM AND WORRY

The Reuters/Ipsos poll also showed 61% worried about increased electricity consumption from data centers, which is only set to grow. Jeff Schultz, senior vice president of portfolio strategy at Cisco Systems, noted the infrastructure to run AI and the chips needed already consume a lot of power, and that network traffic ⁠needed for agentic AI is much higher and steadier than sporadic demand from AI chatbots.

But backlash is growing to the energy-hogging data center clusters that have contributed to rising utility prices. It is evident in places like Virginia and Pennsylvania, even among supporters of President Donald Trump, who has championed AI development and is considering ways to restrict state-level regulations.

There was notable trepidation among speakers at Reuters NEXT from the media and creative industries, due to concern that AI-generated content could replace the creative work of writers or actors.

“When it comes to talent, there is ‍a lot of controversy whether it's acting, whether it's ⁠music, et cetera, and that's where I think we really need to be very aggressive in protecting creative talent and making sure that they are not replaced,” said longtime media executive Shari Redstone.

Sarah Jessica Parker, the longtime star of TV series “Sex and the City,” said she thinks people still value the tactile human experience – citing the unpredictability and spontaneity of performance.

“We’re still – the ⁠majority of us - are relying on the human exchange,” Parker told Reuters editor-in-chief Alessandra Galloni. “Even on film, even though I know there's so much now that you can fix and make prettier or tighter or better, there's still this human element ‌when we talk about the movies we love … I’m not sure that AI will be able to replicate that live nerve.”

Source: Reuters

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Manuel

Stocks

Meta Platforms Inc.’s Mark Zuckerberg is expected to meaningfully cut resources for building the so-called metaverse, an effort that he once framed as the future of the company and the reason for changing its name from Facebook Inc.

Executives are considering potential budget cuts as high as 30% for the metaverse group next year, which includes the virtual worlds product Meta Horizon Worlds and its Quest virtual reality unit, according to people familiar with the talks, who asked not to be named while discussing private company plans. Cuts that high would most likely include layoffs as early as January, according to the people, though a final decision has not yet been made.

Savings from the metaverse cuts are expected to funnel toward other futuristic projects within Meta’s Reality Labs division, including AI glasses and other wearables, according to people familiar with the plans.

The proposed metaverse cuts are part of the company’s annual budget planning for 2026, which included a series of meetings at Zuckerberg’s compound in Hawaii last month, the people said. Zuckerberg has asked Meta executives to look for 10% cuts across the board, which has been the standard request during similar budget cycles the past few years, they added.

The metaverse group was asked to cut deeper this year given that Meta has not seen the level of industry-wide competition over the technology that it once expected, they said. The majority of the proposed cuts are likely to hit Meta’s virtual reality group, which makes up the bulk of metaverse-related spend, the people said. Cuts would also target Horizon Worlds.

The entire metaverse effort has drawn scrutiny from investors, who have seen it as a drain on resources, as well as from watchdogs, who have alleged that children’s privacy and safety have been compromised in the virtual worlds. Shares of Meta jumped as much as 5.7% after markets opened in New York, their biggest intraday gain since July 31.

A spokesperson for Meta declined to comment.

Meta’s vision for the metaverse has not taken off despite Zuckerberg’s conviction, which he still has, that people will one day work and play in virtual worlds. In 2021, as Facebook was facing fallout for user safety and privacy issues, Zuckerberg rebranded the whole company around the idea of the metaverse and started spending heavily on the vision.

The metaverse group sits within Reality Labs, the Meta division focused on long-term bets like VR headsets and AR glasses. That group has lost more than $70 billion since the start of 2021. Zuckerberg has largely stopped mentioning the metaverse in public and on company earnings calls, and is instead focused on developing the large AI models that underpin AI chatbots and other generative AI products, as well as the hardware products that are more linked to those experiences, like Meta’s Ray-Ban smart display glasses.

Some analysts and investors have long advocated that Zuckerberg rid himself of Reality Labs products that continue to drain resources without providing much revenue in return. In April, Mike Proulx, a vice president at research and advisory firm Forrester, predicted that Meta would “shutter its metaverse projects, like Horizon Worlds” before the end of the year.

Meta’s “Reality Labs division continues to be a leaky bucket,” he said in an email at the time, pointing to the unit’s losses. Shuttering metaverse efforts, Proulx said, “would allow the company to give more focus to its AI projects including Llama, Meta AI, and AI glasses.”

Meta is still committed to building consumer hardware, and recently hired Apple Inc.’s top design executive to help.

Source: Bloomberg

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Manuel

Cryptocurrency

Adding a Bitcoin ETF subaccount requires the insurance company to negotiate fees with the ETF issuer, clear internal compliance, and decide that offering crypto exposure serves policyholders’ interests and won’t trigger regulatory blowback.

Most insurers haven’t made that call yet, so the menu defaults to the same equity and bond subaccounts that have been available for decades.

The cultural and compliance layer

Finally, there’s the cultural and compliance layer. Even with the DOL’s reversal, benefits lawyers and consultants are still telling plan fiduciaries that crypto in 401(k)s is legally high-risk and should be approached with extreme caution.

Barron’s and MarketWatch both note that many advisors still view Bitcoin as speculative and suggest allocations of only 1% to 3%, even where ETFs are available, which effectively serves as a de facto soft cap.

Some platforms remain structurally biased toward indirect exposure: Schwab’s crypto education emphasizes ETPs and thematic stocks, not direct coins, steering conservative clients toward “picks and shovels” or diversified funds rather than owning BTC itself.

This is the layer that doesn’t show up in product availability grids but determines what actually happens in practice.

A fiduciary can add a Bitcoin ETF to a 401(k) menu, but if the benefits consultant tells the board that doing so will invite scrutiny and increase litigation risk, the board will choose not to.

An adviser can recommend a 5% Bitcoin allocation, but if the compliance desk flags it as outside the client’s risk tolerance band, the allocation is trimmed to 1% or removed entirely.

The end state is a market where Bitcoin is technically available everywhere but practically available only to clients who know to ask for it, have the risk tolerance to clear compliance gates, and are using platforms that treat crypto as a core asset class rather than a speculative add-on.

The big outright bans are gone. What’s left is a soft infrastructure of defaults, gates, and nudges that keeps most US retirement money in the same equity-and-bond allocations it’s always had.

Source: Cryptoslate

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Manuel

Commodity

The U.S. Defense Logistics Agency still intends to purchase cobalt for the National Defense Stockpile but is reassessing its strategy and has no target date for reissuing the tender, a DLA spokesperson told ‌Reuters on Thursday.

Any purchases of cobalt are likely to cost the agency a lot more as prices have ‌already risen 50% since the original tender was launched in August.

This is the DLA's first cobalt stockpiling effort in more than three decades. The United States needs cobalt to safeguard national security and industrial resilience as competition for strategic minerals intensifies around the world.

The U.S. is also ⁠aiming to reduce reliance on ‌China, which dominates processing of the metal used to make missiles, aerospace parts, magnets for communication and radar and guidance systems.

"DLA is currently reevaluating ‍its acquisition strategy for cobalt. The requirement is still valid, and DLA still intends to purchase the material for the National Defense Stockpile," the DLA spokesperson said. "At this time, the agency does not have a target date for reissuance of the solicitation."

The tender originally announced on August 19 ‌with offers due by August 29 went through several amendments before it was cancelled in October.

Cobalt prices are currently trading around $24 a lb or $52,910 a metric ton, compared with $16 a lb or $35,275 a ton in August. They have been climbing since hitting a nine-year low around $10 a lb in February after top producer Democratic Republic of Congo banned exports.

Congo has ⁠since imposed quotas, but producers are still waiting for government approval to resume exports.

In the original offer, the agency detailed plans to purchase 16.49 million lbs or 7,480 metric tons of cobalt metal over a five-year period for the National Defense Stockpile.

It ‍was initially looking for ⁠offers from only three companies - Vale's Port Colborne and Long Harbour plants in Canada, Japan's Sumitomo Metal Mining and Glencore's Nikkelverk operation in Norway.

Cobalt industry sources say part ⁠of the problem with the tender was the DLA wanting companies to commit to fixed prices for the entire ‌five-year period which doesn't account for price swings that could leave producers facing ‌losses.

Source: Reuters

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Justin

Economic

This year has been the worst for layoffs since the start of the pandemic, a new report shows — and those newly unemployed workers are entering a tough job market.

While a job loss can leave workers scrambling to keep up with bills like their mortgage or children's college tuition, there is one thing it's important to do before you reassess your expenses or talk to lenders, experts say: Apply for unemployment benefits.

It can take weeks for the benefits to reach you, and minimizing that wait can help you shore up your financial situation.

"After a layoff, workers should apply for unemployment benefits immediately to help cover essential expenses and preserve their savings for true emergencies," said certified financial planner Douglas Boneparth, president of Bone Fide Wealth in New York. Boneparth is also a member of the CNBC Financial Advisor Council.

U.S. employers have cut 1.17 million jobs through November of this year, with corporate restructuring, artificial intelligence and tariffs to blame, consulting firm Challenger, Gray & Christmas reported Thursday. That number is the highest level since 2020, during the Covid pandemic.

Payroll processing firm ADP also found this week that the labor market slowdown intensified in November, with private companies cutting 32,000 workers.

If you live in one state and work in another, you'll want to apply for the aid in the state where you worked, experts say.

On a DOL-sponsored website, you can find the contact information for state unemployment agencies.

State agencies should pay benefits within three weeks of your application, but delays have become more common since the pandemic, Evermore said.

"It's probably going to get worse as layoffs increase," she added.

Maximum benefits vary by state

Maximum unemployment benefit amounts vary by state. For example, California's maximum weekly benefit is $450; in Florida, the cap is $275, Evermore said. Recently, the maximum weekly benefit in New York rose to $869.

Standard benefit timeline is 26 weeks, but not always

In most states, claimants can get unemployment benefits for 26 weeks, Evermore said — although it's less in some states. In Florida, for example, the benefits last for just 12 weeks.

Unemployment benefits are subject to taxes

Unemployment benefits are subject to federal taxes, and many states tax them, too. When you start to receive the payments, your state will typically give you the option to have taxes withheld, Evermore said.

It's a good idea to take that option to avoid a potentially hefty tax bill later, she said.

Source: CNBC

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Justin

Economic

U.S. Treasury yields rose on Thursday, snapping a three-day decline, as investors stepped back from bond purchases and consolidated positions ahead of next week's Federal Reserve meeting, where the central bank is widely expected to deliver a third consecutive rate cut.

In the bond market, yields rise when prices fall.

In late morning trading, the benchmark 10-year yield rose 3.4 basis points to 4.092%, while the 30-year yield climbed 2.7 bps to 4.752% (US30YT=RR).

On the front end of the curve, the two-year yield, which reflects interest rate moves by the Fed, advanced 3.3 bps at 3.519% (US2YT=RR).

"We've had a little bit of a streak of lower yields since Monday and with the focus on monetary policy, it feels like rate cuts just kept getting more and more momentum," said Jim Barnes, director of fixed income at Bryn Mawr Trust in Berwyn, Pennsylvania.

"Today you just have a little bit of a giveback. The jobless claims data probably helped with that a little bit. But the market was already trading off earlier, even before the claims data even came out."

ECONOMY LOST 9,000 JOBS IN NOVEMBER: REPORT

U.S. yields, however, pared their increase after data from Revelio Labs, which develops monthly employment estimates from online employment profiles and other information, showed that the economy lost 9,000 jobs in November, a second month of decline after a drop of 9,100 estimated for October.

The report overshadowed weekly U.S. jobless claims numbers that fell to their lowest in more than three years, although analysts said the data could have been skewed lower by the Thanksgiving holiday.

Initial claims for state unemployment benefits fell 27,000 to a seasonally adjusted 191,000 for the week ended November 29, the lowest level since September 2022. Economists polled by Reuters had forecast 220,000 claims for the latest week.

The initial claims number was also consistent with a report showing fewer job cuts in the first 11 months of 2025.

Global outplacement firm Challenger, Gray & Christmas said planned job cuts declined 53% to 71,321 last month from October. They were, however, 24% higher compared to the same period last year, and November's tally was the largest for the month since 2022.

"Initial jobless claims look better than the alternate data sources on layoffs ... (but) the latest week for claims data included the Thanksgiving holiday, and holidays often distort claims data, so this release should be taken with a big grain of salt," wrote Bill Adams, chief economist at Comerica Bank in Dallas.

"Even so, the recent trend looks good, with initial claims averaging a low 215,000 in the last four weeks."

On Thursday, U.S. rate futures have priced in an 87% chance of a 25-bps cut next week, down from 90% on Wednesday, CME FedWatch showed.

Fed funds futures have factored in more than 90 bps of easing next year, with two rate declines in the first half amid expectations the new Fed chair will push steeper rate cuts in line with what President Donald Trump wants.

Source: TradingView

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Olivia Brooks

Stocks

Economic

Forex

Global shares edged up on Thursday, powered by expectations that a U.S. rate cut will support the world's largest economy after data showed employment is slowing, while the dollar was lower and poised for its 10th straight day of losses against a basket of major currencies.

U.S. stocks were losing ground in early trade after two consecutive sessions of gains, with the benchmark S&P 500 (.SPX), flat. Healthcare, consumer discretionary and materials stocks were suffering the most losses, while real estate, financials and utilities were advancing.

The Dow Jones Industrial Average (.DJI), fell 0.09%, the S&P 500 (.SPX), edged down 0.06% and the Nasdaq Composite (.IXIC), lost 0.14%.

In Europe, the STOXX 600 (.STOXX), was up 0.42% and still headed for a modest weekly gain. London's FTSE 100 index (.FTSE), was up 0.16% while Germany's DAX (DAX.O), gained 0.45%. MSCI's gauge of stocks across the globe (.MIWD00000PUS), rose 0.18%.

Japanese stocks rallied sharply after an auction of government bonds drew strong demand from investors, which helped set the tone for the broader equity market. The Nikkei (.N225), rose 2.33%.

"After a 5% pullback in late November, stocks have rebounded and are now trading at the pre-pullback levels and near all-time highs," Michael Farr, chief executive of investment advisory firm Farr, Miller & Washington in Washington.

US PRIVATE PAYROLLS DATA POST BIG DROP

The gains came after U.S. private payrolls data posted their biggest drop in more than two-and-a-half years, and following a survey of the services sector that showed activity held steady in November while hiring slowed.

"If they cut rates by a quarter of a point and then take a pause - which every Fed speaker has indicated, markets might be disappointed in the messaging. If they don't cut and say we're going to wait until the next meeting, markets will be disappointed there too," Farr said.

Fed funds futures are pricing a near 90% chance of a quarter-point cut at the end of the Fed's next meeting on December 10, compared with an 83.4% chance a week ago, according to the CME Group's FedWatch tool.

The dollar index , which tracks the U.S. currency's performance against six others, was last down 0.08% on the day, heading for a 10th straight daily decline, making this its longest stretch of losses since at least 1971, according to LSEG data.

US 10-YEAR TREASURY BOND YIELD UP 3.4 BASIS POINTS

The yield on the U.S. 10-year Treasury bond was last up 3.4 basis points at 4.092%. The Financial Times reported on Wednesday that bond investors had expressed concerns to the U.S. Treasury that Kevin Hassett, a candidate to replace Jerome Powell as Fed chair next year, could aggressively cut interest rates to align with President Donald Trump's preferences.

"I think there's purposeful timing by the Trump administration to announce the president's selection of a new Fed chairman that will be seen - correctly or not - as being more dovish around this meeting to appear as an antidote to the messaging," Farr said.

In Japan, the government's debt sale drew the strongest demand in more than six years, which helped soothe investor nerves about the country's long-term finances that have stoked similar worries about other economies.

The dollar was last down 0.28% at 154.8 against the yen , which is heading for its largest weekly gain against the U.S. currency in over two months.

The yen got another boost from a Reuters report that the Bank of Japan (BOJ) is likely to raise interest rates in December with the government expected to tolerate such a decision, citing three government sources familiar with the deliberations.

Meanwhile, the yuan softened a touch, leaving the dollar up 0.18% at 7.070 yuan in offshore trading in Hong Kong . The Chinese currency hit its strongest level against the dollar in more than a year on Wednesday.

Precious metals cooled after a recent hot streak. Gold was last down 0.28% at $4,195 an ounce, while silver fell 2.4% to $57.03 an ounce, after hitting a record high of $58.98 on Tuesday.

Brent crude was last up 0.06% at $62.71 a barrel.

Reporting by Chibuike Oguh in New York and Gregor Stuart Hunter; Editing by Lincoln Feast, Sonali Paul, Andrew Heavens, Chizu Nomiyama and Ed Osmond