September 06, 2024 | Read Online

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"Far and away the best prize that life offers is the chance to work hard at work worth doing."

— Teddy Roosevelt

Friday hard-working charts

Last week, I joked that AI hasn't lived up to the hype because, "we were promised personal robots."

Well, this week, I learned they're almost here.

1X Technologies has announced that their humanoid robot for the home, Neo, will soon be available for purchase — most likely for less than the cost of a low-end compact car.

I imagine they will sell a lot of them in Japan.

The latest data showed wages there rising at the fastest pace since the 1990s — and that's good, of course.

But also bad: "Labor-shortage related bankruptcies nearly doubled in 2023," BofA economists noted, "and are on track to reach the highest on record."

Labor-shortage bankruptcies!

At the same time everyone is terrified that AI will take all the jobs, companies in Japan are going bankrupt because they have too many jobs.

Japan, at least, needs robots to do some of those jobs — and they need AI to make humans better at the rest of them.

That may be our only hope of defusing the demographic time bomb of shrinking populations that is ticking not just in Japan but in developed economies everywhere (China needs more robots, too, as the WSJ reported this week).

In the still-growing US, however, stock markets were lower today because the economy created only 142,000 jobs in August and that seems like not enough.

But how long will it be before that same number seems like too many?

However long that is is how long AI has to make us more productive.

I'm not sure how much more productive a humanoid robot will make me (I guess it could walk my dogs?) — and my experience with LLMs, so far, is that they stink at writing newsletters.

But an academic study out just yesterday (perhaps the most rigorous on the subject) found that AI makes software developers (arguably almost as important as newsletter writers) 20% more productive.

That's pretty good and, given all the money being thrown at AI research, likely to get a lot better.

Reuters reported this week that the AI startup Safe Superintelligence (SSI) is raising $1 billion from investors at a $5 billion valuation.

SSI is three months old, employs ten humans, and has no product.

$5 billion for ten people is pretty productive!

If they can make the rest of us even remotely that productive, it might all work out.

Let's check the charts.

Not enough?

The US economy added a respectable 142,000 jobs in August, but estimates for June and July were revised down. The three month average — charted above by @bencasselman — shows a weakening US jobs market that's growing slower than the labor force.

Role reversal:

@MikeZaccardi notes that US tech stocks (XLK) are now outpacing US bonds (AGG) by just two percentage points year-to-date, down from 25 percentage points just a couple of months ago.

People like to work:

"Gig jobs" are often maligned as exploitative but @GaryWinslett notes that the people who actually do them appear to be pretty happy with it.

Another jobs misconception?

The immigrants that have recently buoyed the US job market are higher skilled than you probably think.

Doing our bit:

We prime-age workers (I still qualify, just) are doing our best to fill all the jobs with the labor force participation rate near an all-time high of 83.9%.

Mind the bias:

The absurd gap between how Democrats and Republicans perceive the current state of the US economy is a reminder that any economic commentary needs to be adjusted for the commentator's political bias (except mine, obviously).

FWIW:

I'm not sure what Goldman's bias is, but here's their cheat sheet for the impact of the election on the US economy.

Unbiased markets?

@MikeZaccardi notes that, after this morning's weak data, futures markets are pricing in 120 bips of cuts for 2024 and 236 bips for the next 12 months — that's a lot!

So, to recap: The US is worried there are not enough jobs, Japan is worried there are too many, Democrats and Republicans are worried about each other, and AI will either fix or ruin everything.

As for me, I suspect the truth will turn out to be somewhere in the messy — and potentially happy — middle.

Have a great weekend, hard-working readers.

— Byron Gilliam

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Sonya Kim @sonyasunkim

On days like this, we step back and revisit the state of crypto index by @a16z

- # of new crypto applications: up only
- developer library downloads: up only
- # of unique users across blockchains: up only
- # of transactions on blockchains: up only
- stablecoin volume: up… x.com/i/web/status/1…

5:52 PM • Sep 6, 2024

18 Likes 5 Retweets

3 Replies

RenMac: Renaissance Macro Research @RenMacLLC

If you listen to most Fed speakers, you lean to 25, but if you think about Powell's JH speech, he went a bit beyond most of his colleagues. I don't buy the whole build a consensus story. If Powell wants to lay the case out for 50, he will find enough people to go along with him.

2:14 PM • Sep 6, 2024

86 Likes 16 Retweets

10 Replies