The Economy

[phkrause]

? Where wages are rising

Data: National Employment Law Project. Map: Kavya Beheraj/Axios Workers in 19 states are in line for a raise when minimum wage increases take effect on New Year's Day. Why it matters: Beyond those earning minimum wage, these increases often push employers to raise salaries for workers higher up on the income ladder, Axios' Emily Peck reports. Another three states — Florida, Alaska and Oregon — are increasing their minimum wages later in the year. For the first time, there'll be more workers in states with a minimum wage of $15 an hour or higher than those with the federal minimum of $7.25. Keep reading.

[phkrause]

? Next year's economy

Illustration: Sarah Grillo/Axios

The U.S. economy was beaten and battered in 2025, and powered ahead despite it all, Axios Macro co-author Neil Irwin writes. Why it matters: The question for 2026 is whether the underlying sources of weakness will spiral into something that threatens to undermine its overall resilience. Threat level: Beneath buoyant GDP growth and asset prices are serious worries … The labor market is looking softer by the month. Elevated inflation is pinching family budgets. Fears are rising that the AI-fueled boom could leave ordinary workers worse off. Those pain points have already caused public opinion on the economy to turn sharply negative. ? At the same time, one lesson of 2025 is that the U.S. economy is awfully adaptable and can withstand more challenges than you might expect. ? Zoom in: In April, President Trump's "Liberation Day" tariffs sent the stock market swooning and economists upgrading their recession odds. It wasn't the only sign of trouble. Job growth came to a near-halt over the summer. Inflation, meanwhile, has become the fire that will not be fully doused. By the numbers: The headline data numbers have held up just fine. Last week's GDP report showed the economy grew at a 4.3% annual rate in Q3, amid strong consumer spending and the AI-investment surge. The S&P 500 is up more than 17% this year. The unemployment rate edged up during the year to 4.6% in November. But that's still lower than it has been in 69% of months dating back to 1948. ? Reality check: You can't eat GDP, or points of the S&P. And while layoffs are still few, employers have slowed their hiring rates, which means those who do lose their jobs face a tough time.

[phkrause]

Ending ACA tax credits would impose high costs on Black Americans in 10 major metro areas

If Congress allows the enhanced Affordable Care Act (ACA) premium tax credits to expire, millions of working families will lose health care coverage while millions of others will face sharply higher premiums. With four Republicans breaking ranks to vote with Democrats and force a House vote on whether to extend the credits, Congress now has a chance to avert this crisis. Losing the tax credits would be an added blow for households already squeezed by rising costs and tight budgets. But a deeper story emerges when we look at who stands to lose the most. A forthcoming analysis from the Economic Policy Institute and Groundwork Collaborative finds that Black Americans in some of the nation’s largest metropolitan areas would face deep coverage losses and financial harm if credits expire.1

https://www.epi.org/blog/ending-aca-tax-credits-would-impose-high-costs-on-black-americans-in-10-major-metro-areas-over-170000-losing-health-insurance-740-million-more-in-annual-premiums-and-more-than-200-preventable-dea/?

ps:This is what has been planned from his first time in office!!!!!!!!!!

Over 8.3 million workers will benefit from minimum wage increases on January 1

Nineteen states will increase their minimum wages on January 1, boosting earnings for more than 8.3 million workers by a total of $5 billion. In addition, 47 cities and counties will raise their minimum wages, adding to the number of workers likely to get larger paychecks because of lawmakers—or in some cases, voters—taking action to lift state and local wage floors.

https://www.epi.org/blog/over-8-3-million-workers-will-benefit-from-minimum-wage-increases-on-january-1-nineteen-states-will-raise-their-minimum-wages-heres-where/?

[phkrause]

The Haves, Have-Nots, Have-Lots economy

Illustration: Sarah Grillo/Axios

The nation is splitting into three distinct economic realities: the Have-Nots (stalling) ... the Haves (coasting) ... and the Have-Lots (rocketing to greater wealth), Jim VandeHei and Mike Allen write in a "Behind the Curtain" column. Why it matters: This isn't just about "inequality." It's about a structural shift where the growing number of hyperwealthy are profiting wildly off the AI revolution — through exclusive access to private deals, massive investment power, governmental connections, and equity stakes "normal" investors can't touch. ?️ The big picture: This shift, if it holds, will rattle economics, politics and AI throughout 2026 and beyond. We're already seeing it in rising inequality, pessimism about the future and AI opposition. It's human nature to judge your personal economics and mood on how you feel, influenced heavily by conscious and subconscious comparisons to others. So it's possible President Trump is right: U.S. growth and stocks soar in 2026. But even then, because the AI-connected hyperwealthy do so much better than everyone else, fear and resentment still grow. It's also possible the AI bubble pops, and everyone suffers. But the Have-Lots will (mostly) still have lots. ? The Have-Nots: Stuck For the bottom 50%+, the economy, by historical standards, is fine. Wages are growing, unemployment is low, and inflation is moderate. But the mood is sour, reflected in sky-high pessimism about their personal future and AI. This group leans Trump — not massively, but clearly, and enough to matter to MAGA's plans. Their income is up about 4% year-over-year before inflation, lower than the growth for their richer friends. But they're often burning through any increase to keep pace with inflation for food and energy. If they don't own a house, rents are high. And mortgage rates are around 6%, nearly twice what friends and neighbors got five years ago. The surging stock market does little for them. The bottom 50% of Americans own a measly 1% of all U.S. stocks. When Nvidia or Microsoft adds $1 trillion in market cap, it does nothing for the bank accounts of half the country. Roughly 40% of Americans couldn't cover a $400 emergency expense without debt. So it's no wonder working-class or lower-income Americans are downbeat, and fear AI wiping away their jobs or making matters worse. The gap: During the AI bounce of the past two years, the top 10% of households saw their wealth increase by $5 trillion in a single quarter (Q2 2025), while the bottom 50% saw a gain of just $150 billion. ? The Haves: Coasting (nervously) We're talking about roughly a third of U.S. households with $100,000+ in investable assets. They're disproportionately likely to own stocks and retirement accounts. If they're homeowners, many still enjoy low mortgage rates from 2020–21. By most historical measures, they're doing pretty well. Their wages rose 4.4%, and they enjoyed strong market returns in 2025. About 54% of homeowners are sitting on mortgage rates at or below 4%. Those amount to golden handcuffs, keeping housing costs down for those who bought their home before 2022, even as today's 6%+ mortgage rates keep current renters out of the market. Bank of America data shows holiday spending grew much more strongly among higher-income households than lower-income ones. But many are AI-nervous. They tend to hold white-collar jobs threatened by high-performing AI and read daily about the tough job market for their college-age or soon-to-be college-age kids. The lower end of the affluent benefits from broad-based market gains, thanks to AI or AI-adjacent companies. But most aren't putting money directly into the AI startups fueling the hyper wealth growth of the Have-Lots. The University of Michigan's consumer sentiment survey, released Friday, actually found improvement this month "among lower-income consumers, while sentiment fell for those with higher incomes." ⬇️ Column continues below.

[phkrause]

? Part 2: Billionaires' big year

Elon Musk and Nvidia CEO Jensen Huang speak at a Saudi-backed investment forum at the Kennedy Center in November. Photo: Stefani Reynolds/Bloomberg via Getty Images Jim and Mike continue: ? The Have-Lots: Rocketing A new AI aristocracy is upon us. The tech moguls, mega-investors and others benefiting from AI are now in a category of their own that vastly overshadows the mere haves, Jim and Mike continue. This group is quickly accumulating vast wealth and power, in part by growing ever closer to the federal government in what we've called the Silicon Swamp. So the Have-Lots are becoming ever more invested in preserving Washington's status quo, and fending off new federal and state laws and regulations. ? Axios chief economic correspondent Neil Irwin, co-author of our Axios Macro economics newsletter, helped us crunch the numbers, and we found that the Have-Lots are an even more stunning story than we realized. It's hard to overstate what an amazing year 2025 was for the very richest Americans, particularly those with an inside track on AI, Trump or both: Among the 50 richest Americans, the median 2025 increase in net worth was nearly $10 billion, based on the Bloomberg Billionaires Index. That represents a 22% median gain in a year when the S&P 500 rose 16%, and Treasury bills returned less than 4%. Elon Musk's rise in wealth last year, $187 billion (to $600+ billion), is roughly the same as the entire net worths of Bill Gates and Charles Koch combined (about $117 billion for Gates and $69 billion for Koch). It was also a great year for the Google guys. Co-founders Larry Page and Sergey Brin saw their net worth rise by $101 billion and $92 billion, respectively (to $269 billion and $250 billion), while former CEO Eric Schmidt ended the year $17 billion richer (at $53 billion). The bottom line: The haves increasingly fear becoming Have-Nots, while the Have-Lots sock away even more.

[phkrause]

? Grocery prices just keep rising

Data: Bureau of Labor Statistics. (October and November data unavailable due to government shutdown.) Chart: Axios Visuals Grocery prices rose at their fastest pace in three years last month, even as overall inflation held steady, Axios' Courtenay Brown reports. The data highlights the challenge for the White House as the midterms loom: Broad inflation relief is little consolation for Americans if it isn't reflected in their grocery bills. ? By the numbers: Grocery prices rose by 0.7% over the month of December — the largest gain since 2022. ?️ Costs for dining out rose by a similar amount. ? Compared to the prior year, grocery prices were up roughly 2.4%. ? But that masks double-digit increases for a slew of household staples over the past 12 months, including coffee (+20%), beef (+16%) and candy (+10%). Go deeper.

[phkrause]

The job replacement AI machine

Illustration: Allie Carl/Axios

There's little evidence AI is destroying large numbers of white-collar jobs today. But five developments show the potential for massive future job and workplace disruption, Jim VandeHei and Mike Allen write in a "Behind the Curtain" column: A new report from Goldman Sachs Research warns: "AI can potentially automate tasks that account for 25% of all work hours in the U.S. This significant exposure has raised concerns around widespread and permanent job loss, sparking fears of a 'job apocalypse' or 'humans going the way of horses.'" Anthropic revealed this week that one of its AI tools, Claude Code, built a new product, Cowork, which allows others to use AI for workplace tasks normally done by humans — creating presentations, summarizing meetings, consolidating research. You read that right: AI built AI that will displace human work with AI. Use that for a glimpse of what's coming. Some top tech leaders are talking privately about losing interest in H-1B visas — the ones tech companies use to hire top overseas talent. The reason: They now assume AI will do the work. The Wall Street Journal reports that a hot new San Francisco startup, Mercor, has hired more than 30,000 contractors to recruit specialists, from psychologists to dermatologists, to train AI to do their jobs. The company got a $10 billion valuation for a reason. Elon Musk, in a new "Moonshots" podcast episode, says AI is good enough today to replace half of white-collar jobs. He also argues it's "pointless" to go to medical school except for "social reasons." Robots, he says, will be doing surgery at scale within three years. Why it matters: Nothing will determine the future of AI, politics and employment more than if — and how fast — the new technology destroys good-paying jobs. ?️ The big picture: So far, the job market is pretty good by historical standards, with unemployment at 4.4%. But it's been slowing. Many CEOs will tell you privately they plan to run their companies with far fewer people in the years ahead. They're slower to fill open jobs and quicker to determine what roles AI will soon displace. Most new technologies create more jobs than they destroy over time. But there's often pain in between. Both major parties are oddly silent about what to do about the possible jobs inferno that seems to be coming. Among the reasons they express privately: Policy experts are at a loss ... It's not here yet ... Politicians are reluctant to poke the bear on a subject that makes people queasy. You could sit in a room and make a huge dent in many problems if you were willing to make hard enough choices. Not this one. President Trump thinks the problem is the opposite. He told The New York Times last week that we'll need robots just to meet labor demands. "I think just the opposite," he said when told many Americans are concerned that AI will take their jobs. "I think AI is going to be a tremendous job producer. I think that we have so many jobs. My biggest problem isn't taking the jobs. It's that we don't have enough people to fill the jobs, and that's where robots come in." Put that one in a time capsule: Trump will either look clairvoyant — or careless.

[phkrause]

? AI's job evolution

Illustration: Brendan Lynch/Axios

Our column shows what's barreling at us. New data this morning from Anthropic, creator of Claude, gives us a snapshot of this moment: Right now, instead of putting people out of work, AI is mostly helping them do their jobs, Axios' Emily Peck writes from a new edition of the Anthropic Economic Index. ? Zoom in: Today's AI is reshaping how people work, not whether people work. Put another way: AI takes over parts of people's jobs. 49% of jobs can now use AI in at least a quarter of the tasks involved — up from 36% three months ago, Anthropic found. ? The big picture: The way AI changes your job depends a lot on what kind of work you do. Deskilling: AI takes on large portions of many roles, from data entry to IT, putting more work at risk of automation and extending trends decades in the making. Upskilling: AI takes over rote work, giving professionals like radiologists and therapists more time for interacting with clients. ? Friction point: The study finds that AI delivers the biggest productivity gains on complex work — the same work that most requires human oversight. It can take Claude minutes to pull together a broad overview of research, says Peter McCrory, Anthropic's head of economics. But whether or not that actually generates any real value hinges on your expertise in evaluating that work. Full report ... More data on how people use Claude ...

[phkrause]

? Exclusive: America's economic "hinge point"

The U.S. faces a fork in the road: Embrace dynamic capitalism or tolerate stagnation, the leader of America's biggest business group will say today in a major speech.

• Why it matters: American business leaders see strains of thought in both major parties that they believe threaten the nation's economic vibrancy as the U.S. approaches its 250th birthday, Axios' Neil Irwin writes.

Suzanne P. Clark, president of the U.S. Chamber of Commerce, will make a full-throated case for embracing the power of markets at the group's "State of American Business" event this afternoon, according to a prepared text seen first by Axios.

• "Not only is this America's 250th year, but it is a year when competing visions for America's economic future are coming to a head," Clark will say, describing it as a "hinge point."
• Voters are frustrated about affordability and job opportunities, and a growing number "are willing to throw out capitalism and try something different," she warns.

? Between the lines: The speech, which will be delivered before some of America's most prominent CEOs, doesn't mention any elected officials by name. But it doesn't take much imagination to discern the political trends Clark sees as contrary to the cause of American prosperity.

• Some Democrats openly embrace socialism, and corporate leaders widely believe the Biden years featured a damaging anti-business regulatory overreach.
• President Trump has implemented the highest tariffs in nearly a century and sought to micromanage companies' decision-making from the Oval Office.

? Gallup polling released yesterday found a near-record share of Americans see big business as the biggest threat to the country's future — behind big government.

[phkrause]

? Trump's mass deportation trouble

Photo illustration: Sarah Grillo/Axios. Photos: Getty Images

Support for President Trump's immigration crackdown is unraveling quickly and reviving Democratic opposition on an issue that helped decide the last election, Axios' Brittany Gibson writes. Why it matters: Border chaos under former President Biden helped return Trump to power. Now, it's chaos from ICE and other Trump immigration enforcers that's turning off the public, one viral video at a time. Just weeks after Trump was sworn in, ICE had a +16 positive favorability rating, according to a YouGov/Economist poll. Majorities now disapprove of ICE raids and how the agency is handling its job. Americans are now statistically split on whether to abolish ICE altogether, according to one poll. If that anger carries into the midterms, a Democratic House majority could cut off ICE funding, subpoena DHS and even impeach Homeland Security Secretary Kristi Noem. Keep reading.

[phkrause]

?️ Scoop: BlackRock's new AI warning

Data: Bureau of Labor Statistics via BlackRock. (National average includes all wage and salary workers, self-employed workers, and workers in agriculture and private households.) Chart: Axios Visuals The world is on the cusp of a generation-defining construction boom, but the U.S. may not have enough workers to make it happen, Axios' Courtenay Brown & Megan Morrone write from a new BlackRock paper. Why it matters: This is the new fault line of the global economy — soaring demand for some workers and shrinking appetite for others. It could result in widening financial gaps. ?️ Fueling the construction boom are the AI buildout and a fresh push to bring manufacturing facilities onshore and upgrade aging infrastructure. A looming retirement wave is coming as demand rises for jobs disproportionately filled by older workers. ⏳ "The world is entering what could be the greatest period of construction in human history," Sandra Lawson, BlackRock managing director of corporate affairs, writes in the new report. "[L]abor could be a potential constraint if the world cannot train workers quickly enough." "The infrastructure buildout is creating new demand for jobs in skilled trades, like electricians, HVAC technicians, plumbers and more." ? What to watch: BlackRock says the AI infrastructure boom will require large-scale workforce training. But lawmakers have been mostly silent, and Big Tech's upskilling efforts remain early and limited. Keep reading.

[phkrause]

? Reality check: Rising power bills

Data: EIA. Chart: Erin Davis/Axios Visuals President Trump said in a Truth Social post this week that the average American household's monthly utility bills rose "over 30%" under President Biden. Axios national energy correspondent Amy Harder goes between the lines: National electricity prices rose 4.7%, when adjusted for inflation, during Biden's term, with a noticeable uptick in 2022, alongside the early boom in AI, according to the Trump administration's own energy stats agency. Without adjusting for inflation, that figure rises to 25.8%, far closer to Trump's claim. ? Between the lines: Some states — particularly those in the mid-Atlantic where more and more data centers are being built to power AI — are seeing higher-than-average price spikes. Administration officials joined a bipartisan group of governors yesterday in pushing for tech companies to pitch in to bring down prices. Read on.

[phkrause]

⚠️ Economy's danger zone

Data: Moody's Analytics analysis of Federal Reserve, BEA and census data. Chart: Axios Visuals The health of the economy increasingly depends on rich people spending money, Axios' Emily Peck writes from a Moody's analysis of government data. Why it matters: That puts the U.S. in a fragile place because consumer spending drives growth — so the economy now relies on a smaller number of people to keep things afloat. ? The big picture: Inflation and a lackluster job market are weighing on most people, and their level of spending has flatlined. But at the high end, things are looking pretty good — particularly for those in the stock market. ? By the numbers: 59% of all consumer spending now comes from the top 20% of income earners, a near record high, according to a Moody's Analytics analysis of recently released numbers from the Federal Reserve. Only 41% of spending comes from the bottom 80% — a record low.

[phkrause]

5 Things to Know About North Carolina’s Economy as 2026 begins

North Carolinians power our economy through their work every day, in every corner of the state — from growing and harvesting our food, to caring for and educating our children, to researching and developing new medicines and technologies that improve our lives. Their labor powers our economy.  

https://ncbudget.org/5-things-to-know-about-north-carolinas-economy-as-2026-begins/?

[phkrause]

? AI fuels "low-hire, low-fire" economy

Illustration: Aïda Amer/Axios

Companies aren't doing much hiring or firing these days, and AI looks like a big part of the reason, Axios' Emily Peck writes. Why it matters: Employers can become more productive without increasing headcount. But for anyone looking for a job, it's brutal. ?️ The big picture: Economists are calling it a no-hire, no-fire labor market. Federal data show hiring rates among U.S. employers are at levels last seen a decade ago, when the economy was emerging from a recession. Despite predictions of an AI job apocalypse, firing rates are also still relatively low. The unemployment rate in December was a not-terrible 4.4%.

[phkrause]

👩‍💻 Gen Zers are career optimists

Illustration: Sarah Grillo/Axios Gen Zers are largely optimistic about their career prospects, April Rubin reports from a new Indeed survey. 👍 Gen Zers report a 77% net positive career outlook, compared to 65% of millennials. Data: Indeed/YouGov; Chart: Axios Visuals Overall, 59% of job seekers feel confident about achieving their career goals. Go deeper.

[phkrause]

Strong unions, stronger communities and democracy

There is an undeniable correlation between higher levels of unionization and stronger economic, community, and democratic outcomes. States with a larger share of workers represented by a union enjoy higher incomes, greater access to health insurance, and fewer voting restrictions.

https://www.epi.org/publication/strong-unions-stronger-communities-and-democracy/?

[phkrause]

Some companies tie AI to layoffs, but the reality is more complicated

The one thing N. Lee Plumb knows for sure about being laid off from Amazon last week is that it wasn’t a failure to get on board with the company’s artificial intelligence plans.

https://apnews.com/article/ai-job-impacts-layoffs-amazon-pinterest-dow-7736d042172743301dd7e494813a885d?

• 📆 January jobs data will be delayed amid the partial government shutdown, Axios' Neil Irwin reports. Go deeper.

• 👟 The federal agency in charge of enforcing workplace anti-discrimination laws is investigating Nike over its treatment of white employees. Go deeper.
• 🛩️ Stealthy new surveillance drones aided the U.S. capture of Venezuelan strongman Nicolás Maduro last month, Lockheed Martin confirmed — a rare, public flex of such a secretive asset, Axios' Colin Demarest reports. Go deeper.

[phkrause]

Washington Post cuts a third of its staff in a blow to a legendary news brand

The Washington Post laid off one-third of its staff Wednesday, eliminating its sports section, several foreign bureaus and its books coverage in a widespread purge that represented a brutal blow to journalism and one of its most legendary brands.

https://apnews.com/article/washington-post-staff-reduction-layoffs-cuts-923f87d4bd319c8a64b278165d0a6e27?

📰 Inside WaPo's sweeping layoffs

Illustration: Aïda Amer/Axios The Washington Post laid off one-third of its staff today — including 300+ of roughly 800 journalists in its legendary newsroom, Axios' Sara Fischer reports. 🌎 The cuts will have a major impact on the Post's award-winning international desk, and on its sports and metro coverage. The stand-alone Book World section in the Sunday paper will close. Among those laid off: Ukraine correspondent Lizzie Johnson ("in the middle of a warzone," she posted on X) and Amazon beat reporter Caroline O'Donovan ("along with just a ton of the best in the biz"). All of the paper's Middle East correspondents and editors were let go. Once considered a historic success story, the Post devolved into a shell of itself as it tried to reinvent its brand. 📈 The paper experienced a decade of growth and optimism after it was purchased by billionaire Jeff Bezos for just $250 million in 2013. The hiring of a controversial new management team in 2024 and opinion section changes driven by Bezos fueled a talent exodus. A Post spokesperson said: "The Washington Post is taking a number of difficult but decisive actions today for our future, in what amounts to a significant restructuring across the company." "These steps are designed to strengthen our footing and sharpen our focus on delivering the distinctive journalism that sets The Post apart and, most importantly, engages our customers." The Post sports section has been home to bylines the likes of John Feinstein, Michael Wilbon, Shirley Povich, Sally Jenkins and Tony Kornheiser. Go deeper ...

[phkrause]

💼 Labor market warning signs

Data: Bureau of Labor Statistics; Chart: Axios Visuals A labor market that once looked to be stabilizing is now showing clear cracks, with job openings collapsing and early signs of rising layoffs. It raises the risk that policymakers misread whether conditions are steadying or slipping into a deeper slump, Axios' Courtenay Brown and Neil Irwin write. Data: Challenger, Gray & Christmas; Chart: Axios Visuals 😓 America's angst about the labor market is at multidecade highs. A big picture look at the economic data — including indicators released today — explains why. Stunning stat: Since December, there are 0.9 open jobs for every unemployed worker. That's a big turnaround from just four years ago, when the peak was two open jobs for every available worker. Keep reading.

[phkrause]

👧🏾 What babysitters make

Data: UrbanSitter. (Metro areas sorted by average rate for 2 children.) Chart: Axios Visuals Average babysitting rates in the U.S. rose nearly 5% last year, hitting $26.24 per hour for one child, Alex Fitzpatrick reports from new UrbanSitter data. 💸 Parents are paying nearly $30/hour on average for two kids, the sitter-finding platform says. Rates tend to be higher in places with steeper costs of living. 🌉 San Francisco ($29.63/hour for 1 kid) and Seattle ($27.70/hour) have some of the highest rates. See the report.