The Economy

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Meta layoffs

Meta, the parent company of Instagram and Facebook, said it plans to lay off roughly 10% of its workforce — about 8,000 people — and close thousands of open roles. The move is the latest in a string of tech industry layoffs fueled in part by artificial intelligence. Meta has also been on an aggressive AI spending spree, shelling out more than $72 billion for data centers and other AI infrastructure in 2025. Read more

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State of Working America Q1 Economic Briefing

Economic Policy Institute Chief Economist Josh Bivens and Senior Economist Ben Zipperer, in conversation with Senior Policy and Economic Analyst Chandra Childers, on how current policies are impacting working people and families, along with solutions that create a more affordable life for everyone.

https://www.epi.org/event/state-of-working-america-q1-economic-briefing/?

Taxes are good, actually—especially if you care about affordability

For decades, anti-tax politicians have tried to smuggle in large tax cuts for the ultrarich and corporations by loudly offering tax cut crumbs to the middle class. Key to this effort has been framing taxes as a pure drain on typical families’ ability to afford a secure economic life. Any success in this dishonest campaign to foster anti-tax sentiment is a disaster for working people—and that’s why some recent tax policy ideas from Democrats and the rhetoric around them are so deflating.

https://www.epi.org/blog/taxes-are-good-actually-especially-if-you-care-about-affordability/?

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💰 AI costing companies more than humans

Illustration: Aïda Amer/Axios IT budgets are being blown out as some companies spend more on AI than on employees' salaries, Axios' Mady Mills writes. "For my team, the cost of compute is far beyond the costs of the employees," Bryan Catanzaro, vice president of applied deep learning at Nvidia, told Axios. Uber's chief technology officer already blew through his full 2026 AI budget due to token costs, according to The Information.

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💸 Surprise! Consumer confidence ticks up

Data: Conference Board via FactSet. Chart: Noah Bressner/Axios U.S. consumer confidence unexpectedly rose in April despite growing anxiety over energy prices and the war in Iran. The Conference Board's consumer confidence index inched up to 92.8 in April from 92.2 in March. 🥊 Reality check: Though the gauge has ticked up the past two months, the reading remains near its lowest level since the pandemic. Go deeper.

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🤔 Big Law's AI conundrum

Illustration: Sarah Grillo/Axios. Stock: Getty Images

AI is wiping out some entry-level work that trains the next generation of elite lawyers, writes Axios' Russell Contreras. Why it matters: Big Law's entire business model depends on armies of junior associates learning on the job. If AI erases that rung, the profession faces a long-term talent crisis. 🧠 The big picture: The legal profession's most important classroom, the early-career grind of junior and summer associates, is quietly reshaping, as the path to partnership is being rewritten in real time. Firms are racing to "extract the knowledge of their lawyers" and embed it in AI workflows, client portals and self-service tools, Stanford Law professor David Freeman Engstrom tells Axios. Between the lines: If AI removes the low-level reps, firms must invent a new apprenticeship system or risk creating lawyers who can supervise AI outputs without having built the judgment to know when those outputs are wrong. As AI automates some law firm work, the traditional "leverage model"— the pyramid system where a few partners sit atop a massive base of billing associates — faces a structural threat. The bottom line: The future lawyer won't be a document reviewer. They'll be a "symphony conductor" who pieces together AI outputs, data and legal scenarios, Engstrom said. Axios CEO Jim VandeHei: A letter to young people on the AI shift.

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🔮 It's going to be a K

Data: Federal Reserve Bank of New York. Chart: Courtenay Brown/Axios Intel from Axios Macro maestros Courtenay Brown and Neil Irwin, who examine new research that says our bad-vibes economy might be the same as it ever was: The uncomfortable new normal for the U.S. economy: spending growth concentrated at the top of the income ladder, a split largely explained by wealth gains from financial assets. Why it matters: The K-shaped economy is real, though it is not particularly new. That's the conclusion of new research from the Federal Reserve Bank of New York. The conclusion confirms an economic risk lurking beneath an economy that is navigating relentless disruption — a war driving energy prices higher, AI uncertainty and more — where spending growth is concentrated in a single cohort that could pull back sharply with a market downturn. Since 2023, the real net worth of the top 1% of earners climbed more than 25%, fueled largely by surging financial assets, while the middle 40% of households gained less than 10%, the New York Fed finds.

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The Trump agenda has harmed the D.C. regional economy. Other regions should brace for impact.

Economic data from the first year of the president’s second term show declining employment, increased unemployment, and lagging private-sector growth.

https://www.epi.org/publication/the-trump-agenda-has-harmed-the-d-c-regional-economy-other-regions-should-brace-for-impact-economic-data-from-the-first-year-of-the-presidents-second-term/?

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💸 "Best earnings seasons in 20 years"

Illustration: Sarah Grillo/Axios

Corporate America is delivering the goods this earnings season — even as rising energy prices threaten to undermine the momentum, Axios' Nathan Bomey writes. Why it matters: Economic uncertainty tied to the Iran war, stubborn inflation and souring consumer sentiment haven't derailed earnings in Q1. Deutsche Bank researchers said yesterday that "this is one of the best earnings seasons in 20 years." All 11 top-level sectors of the S&P 500 — including technology, healthcare and industrials — are expected to show year-over-year earnings growth for the first time in four years, they noted. Keep reading.

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US employers defy economic shock from Iran war and add a surprisingly strong 115,000 jobs in April

WASHINGTON (AP) — America’s employers delivered a surprising 115,000 new jobs last month despite an economic shock from the Iran war.

https://apnews.com/article/jobs-economy-unemployment-trump-iran-war-2cf46bfbf7748403ea0245100af45504?

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📈 Data du jour: Tale of two charts

Data: Bureau of Labor Statistics. Chart: Neil Irwin/Axios The job market is steady (above) and unemployment remains at a healthy 4.3%. But consumer sentiment (below) keeps hitting record lows, with rising gas prices partially to blame. Data: University of Michigan. Chart: Neil Irwin/Axios Go deeper.

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Small business dynamism

Illustration: Aïda Amer/Axios. Stock: Getty Images

Americans are starting businesses at a record pace — an entrepreneurial hot streak that helps set the U.S. apart from the rest of the global economy, Axios' Courtenay Brown writes. 📈 Why it matters: The strong pace of new startups in the years since the pandemic likely plays a role in U.S. economic resilience and dynamism. It's amplified by AI, which gives the smallest startups new capabilities that once required much larger operations. 🖼️ The big picture: Small businesses employ about half of the American private-sector workforce. So far this year, the nation's smallest businesses are doing the bulk of hiring. Through the first four months of 2026, the smallest companies — those with fewer than 20 employees — have added 236,000 jobs, according to payroll processor ADP. That accounts for a whopping 95% of the economy's net gains over that period. ✨ Small businesses drive our economy. "You rarely find a large business that just appears out of nowhere with hundreds, if not thousands, of employees," Holly Wade, executive director of the National Federation of Independent Business, a small business lobbying group, tells Axios. "They start off small." 🗣️ State of play: Americans are filing paperwork to start new businesses at near-record rates — averaging 470,000 applications a month in 2025. That's about 66% above pre-pandemic norms. This year, those applications are running even higher. 🤔 Yes, but: Would-be entrepreneurs filing applications with planned wages — meaning they intend to take on employees, the surest sign of a real, lasting company — fell back to pre-pandemic levels in 2025 and are tracking even lower this year. 🧑🏽‍💻 Zoom in: That means the startup surge is increasingly composed of solo operators rather than businesses with plans to hire. AI tools may be enabling this. A one-person business can do the work that previously required staff. 💪 Zoom out: Fed research shows AI adoption among the smallest businesses — those with fewer than 50 employees — is stronger than would be expected based on size alone. 👀 What to watch: The White House is betting AI will be the "great equalizer," Trump's top economist Kevin Hassett told Axios last month. "It's making it so that small businesses who start to use AI can compete better with big businesses," Hassett says.

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😓 Reality check: It's hard!

Data: Census Bureau. Chart: Axios Visuals The pandemic may have touched off a historic startup boom, but many of those new businesses have struggled. Truth is, it's been pretty hard to run a business in the recently rocky economy, Courtenay writes. 📊 State of play: Among the new businesses started in 2022, an above-average share shuttered within three years, according to government data. Those businesses launched on the assumption that low interest rates and strong demand would last. But they got hit right out of the gate with rapid rate hikes and an inflation shock. 📉 The latest: Confidence among small business owners fell below historical norms in March in the wake of the Iran war energy shock, according to a survey by the National Federation of Independent Business that has been conducted for the last 50 years. 💪 The bottom line: The difficulties associated with operating a small business haven't dented America's entrepreneurial spirit.

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🌆 What's working: Pittsburgh

Illustration: Aïda Amer/Axios. Stock: Getty Images

In Pittsburgh, city leaders are showing extra love to small biz, Axios Pittsburgh's Ryan Deto reports. 🛍️ Why it matters: They're betting that small, local shops are the secret sauce to revitalizing downtown, which has only recovered about two-thirds of its 2019 foot traffic. 🏙️ What they're doing: The Pittsburgh Downtown Partnership this year started a Vibrancy Initiative focused on making it easier to open small businesses in the neighborhood. The program includes infrastructure improvements, temporary rent abatement, short-term leases for pop-up businesses, and public art installations. Read more ...

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🌏 Immigrants' entrepreneurial spirit

Illustration: Aïda Amer/Axios. Stock: Getty Images

Immigrants play an outsized role in entrepreneurship, launching more than 20% of U.S. businesses while representing just 15% of the population, according to a National Bureau of Economic Research paper published in 2024, Axios' Nathan Bomey writes. About 3.5 million immigrants are self-employed, according to the Immigration Research Initiative. 🔎 Zoom in: All big businesses started out small — and many of the country's most valuable companies had immigrant founders. Immigrants or the children of immigrants founded nearly half of Fortune 500 companies as of 2023, according to one analysis. Those include Jensen Huang's Nvidia, Elon Musk's SpaceX and Tesla, and Sergey Brin's Alphabet. 💬 What they're saying: "You're getting the best of the best to come here, and it is helping drive the economy," says Rajshree Agarwal, director of the Ed Snider Center for Enterprise and Markets at the University of Maryland. What to watch: Mass deportations and stiffer immigration restrictions could undermine small businesses, as entrepreneurs fret about their own residency, face expensive visa rules and struggle to retain foreign-born employees.

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🛢️ Charted: Oil export boom

Data: U.S. Energy Information Administration. Chart: Emily Peck/Axios The U.S. is exporting a record amount of oil and other petroleum products during the Iran war, Axios' Emily Peck writes. America's export surge is being fueled by inventories — including strategic reserves — rather than by higher oil production this year. That means it's unclear how long the country can keep exports up.

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The Iran war is hitting home as gasoline prices fuel inflation surge of 3.8% in the US

WASHINGTON (AP) — U.S. consumer prices climbed sharply again last month as the 10-week war with Iran delivered higher gasoline prices and more pain for Americans.

https://apnews.com/article/us-inflation-consumer-iran-war-3f11b7fdd20ea56d2f0895e5241af7b6?

Inflation outpaces wages

Data: Bureau of Labor Statistics. Chart: Axios Visuals New data today: Americans' paychecks are lagging behind inflation for the first time in three years, Axios' Courtenay Brown reports. That's amid an energy shock and other effects of the Iran war. 📈 The Consumer Price Index, which measures inflation, rose 3.8% in April year over year. That's up from 3.3% in March. Wages increased 3.6% — better than March, but not enough to offset inflation. In other words, worker pay fell 0.2% in real terms. 🛢️ Higher energy prices accounted for the bulk of last month's jump in inflation, rising nearly 4% after gaining about 11% in March. Food prices also soared in the second full month of the war. 🌊 James McCann, a senior economist at Edward Jones, writes in a note: "American households continue to feel the brunt of surging energy costs, adding to the deluge of inflation they have weathered since the pandemic." "Moreover, with the Strait of Hormuz still effectively shuttered, the risk that we are not past the peak of these price pressures is rising." Go deeper.

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Prices Up, Wages Down

Inflation outpaced wage growth in April for the first time in three years, according to a Labor Department report released yesterday. Inflation-adjusted hourly wages fell 0.3% year-over-year, as inflation climbed 3.8%—its fastest increase in three years. Economists largely attribute rising inflation to the energy chokehold caused by the Iran war's effective closure of the Strait of Hormuz, a critical shipping route for about one-fifth of the world’s oil and natural gas. Energy costs climbed roughly 18% from a year earlier, with gasoline up 28% and airfare up 21%. Meanwhile, core inflation, which excludes food and energy prices, rose 2.8% year-over-year. The Federal Reserve closely watches this less volatile number when weighing interest rate cuts. Yesterday's report bolstered expert predictions that the central bank will not lower interest rates until mid-next year. (Explore the connection between interest rates and inflation here.) Energy isn't the only culprit: Tomatoes are almost 40% more expensive than last year. How is this possible?

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Young college graduates face a weaker labor market—but a more mixed picture than the headlines suggest

Over the last couple of years, the overall labor market has slowly weakened—with many arguing that the weakening is most pronounced for young college graduates (whom we define as young workers ages 22–27 with only a college degree).1 The evidence is actually pretty mixed—by some measures the young college graduate labor market is notably weaker, but their outcomes are largely no worse than those of noncollege young people or the labor market writ large.

https://www.epi.org/blog/class-of-2026-young-college-graduates-face-a-weaker-labor-market-but-a-more-mixed-picture-than-the-headlines-suggest/?

A snapshot of Black employment trends under Trump 2.0

The rising Black unemployment rate and big employment losses among Black women made major news headlines in 2025. In a February 2026 analysis, I examined the nature of those losses, noting the large impact on Black women who were college graduates and public-sector workers. With so much of the Trump policy-induced 2025 labor market decline appearing to land first on Black workers who typically have relatively secure employment, the longer-term significance of those losses is of continuing interest. This post provides an update for the first quarter of 2026, examining changes in the overall Black unemployment rate and gender-specific employment trends for Black women and men relative to the first quarter of 2025. For consistency with the prior analysis, I apply the same mutually exclusive race and ethnicity categories used in EPI’s State of Working America Data Library and include all people age 16 or older when examining outcomes by gender. While these estimates differ slightly from those reported by the Bureau of Labor Statistics (BLS), they lead to similar conclusions.

https://www.epi.org/blog/a-snapshot-of-black-employment-trends-under-trump-2-0-black-workers-particularly-men-are-experiencing-lower-employment-compared-with-a-year-ago/?

Job gains were steady in April, but wage growth continued to weaken

Below, EPI senior economist Elise Gould offers her insights on the jobs report released this morning, which showed 115,000 jobs added in April. Read the full thread here. 

https://www.epi.org/blog/job-gains-were-steady-in-april-but-wage-growth-continued-to-weaken/?

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💼 Workplace perks shrink

Illustration: Lindsey Bailey/Axios

The era of ever-expanding workplace perks is ending. It's not just free kombucha and laundry — policies like paid parental leave and retirement matches are on the chopping block, Axios' Tina Reed reports. Why it matters: Corporate America spent the labor-shortage years competing to offer the most generous workplace benefits. Now, with soaring health-care costs and workers losing leverage amid an AI reckoning, some employers are rolling them back. The big picture: First, it was the return to the office. 💸 Now, benefits that became standard during COVID and workforce shortages — from fertility subsidies to 401(k) matches — appear on shakier ground in an era dominated by AI spending and rising health costs. 🤰Deloitte and Zoom are among the largest companies to grab headlines recently with pullbacks on family leave. 🩺 Recent surveys suggest many companies plan to cut benefits to fund AI investments and cover rising health care costs. What to watch: Benefits consultants say white-collar workers may be in less of a position to demand perks when AI appears capable of replacing some of the workforce. It's a reversal from the flashy days of the tech boom, when companies raced to recruit and retain key talent with free meals, massages and in-house fitness centers.

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💵 The Powell school of leadership

Jerome Powell. Photo illustration: Aïda Amer/Axios. Photo: Andrew Harnik and Al Drago/Bloomberg via Getty Images

Axios' chief economic correspondent Neil Irwin, who had a front-row seat for Jerome Powell's eight years as Federal Reserve chair, reflects on Powell's legacy as Kevin Warsh takes over: Powell guided the U.S. economy through extreme tumult and fought off unprecedented presidential efforts to undermine the Federal Reserve's independence. But it's Powell's approach to duty and public service that is his ultimate legacy as a leader and that will shape his place in history. For the better part of the last decade, I've either watched on a screen or been physically present for pretty much everything Powell has said in public. Two sentences stick most in my memory. 😷 It was April 2020. The world was on lockdown, the unemployment rate was nearly 15%, GDP was in free fall, and the future appeared bleak. 📜 "None of us has the luxury of choosing our challenges; fate and history provide them for us," Powell said. "Our job is to meet the tests we are presented." The big picture: Powell's mistakes contributed to the painful inflation of the early 2020s. But he has led a crucial American institution for eight long years with a deep sense of public purpose. Read Neil's full analysis. ps:Actually one of the best picks if not the best pick of trump in is first term as potus!!!!!

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🥊 New data: Iran war hits Main Street hard

Illustration: Lindsey Bailey/Axios

Small business profits are sinking as owners get squeezed by rising labor costs and energy prices spiking from the Iran war, Axios' Nathan Bomey writes from a new Bank of America Institute report. Why it matters: Businesses with fewer than 250 workers created half of all new jobs over the past half-decade. By the numbers: Small business profitability in April suffered its biggest decline in two years, falling 1.3% after gas prices spiked, according to the report. Small businesses spent 31% more on gasoline in April than they did a year earlier, according to the BofA Institute report. The average price of gas is $4.56 today, up 40%+ from a year earlier.

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U.S. employers spend more than $1.5 billion annually on union avoidance

In 2025, unionization in the United States grew to its highest levels since 2009 (McNicholas, Poydock, and Shierholz 2026). This growth is a testament to the fact that Americans increasingly view unions favorably and recognize them as critical instruments for building a just economy. Yet more than 50 million nonunion workers would join a union but are unable to do so because our nation’s labor laws allow employers to derail workers’ unionization efforts (McNicholas et al. 2019).

https://www.epi.org/publication/u-s-employers-spend-more-than-1-5-billion-annually-on-union-avoidance/?

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• 📉 A key measure of U.S. consumer sentiment hit a new all-time low this month. The University of Michigan index fell to 44.2 amid worries about gas prices, inflation and more. Go deeper.

Rising inequality is the root of affordability problems

When most people—including policymakers—complain about a lack of affordability, they think of prices being too high. But affordability is the outcome of a race between prices and incomes. After all, goods and services were a lot cheaper 90 years ago during the Great Depression, but we all know that nearly everybody is richer today than their peers back then. Bringing incomes into the affordability picture makes for better understanding and better policy.

https://www.epi.org/blog/rising-inequality-is-the-root-of-affordability-problems/?

Taking affordability seriously

Affordability has been the policy buzzword of recent years. Much of the affordability discourse—both among policymakers and the public—has focused near-exclusively on prices as the big affordability problem. But affordability is not a problem of high prices, instead it’s the outcome of a race between incomes and prices. And the reason typical families have faced an affordability crunch in recent decades is not because prices have grown exceptionally fast, it’s because incomes for the vast majority have grown too slowly. This income growth has been suppressed mostly by rising inequality that has put a growing wedge between overall economic growth and the income growth of typical families.

https://www.epi.org/blog/taking-affordability-seriously-even-with-recent-oil-shocks-affordability-remains-mostly-an-issue-of-incomes-not-prices/?

A 2022 State Law Slashed Unemployment Insurance, Now Kentuckians Are Running Out of Benefits

In 2022, the General Assembly passed House Bill (HB) 4, a sweeping cut to Kentucky’s unemployment insurance program that reduced the number of weeks workers could claim jobless benefits. For more than 80 years, Kentuckians could claim 26 weeks of unemployment benefits, which is still the standard in most states. But HB 4 reduced the maximum to 14 weeks, though it was changed to 16 weeks the next year.

https://kypolicy.org/kentuckians-are-running-out-of-unemployment-benefits/?

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🌯 Small vibecession splurges

Illustration: Sarah Grillo/Axios. Stock: Getty Images

Americans feeling pinched financially are splurging on small treats while economic anxiety and inflation jitters put off larger purchases, Axios' Rebecca Falconer writes. Why it matters: Expect lower-income households to opt for movies or staycations this Memorial Day weekend as economic conditions tighten. 🎟️ Theaters charge a national ticket average of $10.75, and $14–$20 for IMAX and premium formats. That can be an affordable splurge. Other vibecession winners include food-delivery services like DoorDash, which reported a 27% year-over-year increase in orders in the first quarter. Cosmetics are benefiting from the so-called "lipstick index" — the theory that shoppers swap big-ticket purchases for small, affordable indulgences in shaky economies. Keep reading.

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Setting high standards for a federal minimum wage

The federal minimum wage, frozen at $7.25 since 2009, is now at its lowest real value in 77 years and a major driver of the affordability crisis facing low-wage workers. For over a decade, the senior Democrats on the House and Senate’s labor committees have consistently introduced and championed the Raise the Wage Act, which would significantly raise the federal level (most recently, to $17 an hour in 2030) and index it to median wage growth going forward. But Congress as a whole has failed to take action on the legislation. In the absence of federal movement, states have moved on their own: Thanks in large part to the Fight for $15 campaign, 21 states and the District of Columbia, home to half of all U.S. wage earners, will have a minimum wage of at least $15 by 2028. But that patchwork still leaves 20 states—home to about 55 million workers—at $7.25, and updating the federal floor to a modern benchmark is the only way to reach these workers.

https://www.epi.org/publication/setting-high-standards-for-a-federal-minimum-wage-raising-the-wage-to-two-thirds-of-the-national-median-wage-would-lift-pay-for-nearly-40-million-workers/?

Median pay for CEOs rose nearly 6% in 2025, but some compensation packages were eye-popping

The typical CEO compensation package rose nearly 6% in 2025 to $17.7 million, as company boards rewarded their top executives for bigger profits and higher stock prices, and gave them incentives to stick around and make even more money for shareholders. At half the companies in AP’s survey, it would take the worker at the middle of the company’s pay scale 200 years to make what the CEO did in one, up from 192 years in last year's survey. Read more.

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