Two major gauges of consumer confidence declined in May, with the University of Michigan's sentiment index falling to a record low of 44.8 as gas prices and inflation fueled by the Iran war erode household budgets.
The Conference Board's Consumer Confidence Index slipped 0.7 points to 93.1 in May, the first decline after three months of gains, with confidence rising among households earning above $100,000 while falling for most others.
Fifty-seven percent of University of Michigan survey respondents spontaneously cited high prices as eroding their personal finances, up from 50% in April.
Consumers now expect prices to rise 3.9% annually over the next five to ten years, up from 3.5% in April, with near-term expectations at 4.8%.
Gas prices have surged to a national average of $4.49 a gallon from $2.98 before the Iran war began at the end of February.
Two-thirds of Conference Board respondents said they are cutting back spending in response to rising prices, with most reducing overall purchases and delaying larger acquisitions.
Average hourly earnings, adjusted for inflation, shrank in April from a year earlier for the first time in three years.
Read more via Bloomberg, AP, Conference Board
Minneapolis Federal Reserve President Neel Kashkari said this week that bringing down inflation remains the central bank's primary focus, noting that while the labor market is in "decent shape," consumer prices are "simply much too high."
U.S. headline inflation stood at 3.8% in April, above the Fed's 2% target, which Kashkari noted has been missed for more than five years.
Kashkari attributed current price pressures primarily to energy and fertilizer costs, warning that if inflation expectations become unanchored, the Fed would need to respond more aggressively.
On AI, Kashkari said U.S. businesses are finding productive uses for the technology, but that its implications for monetary policy remain too early to assess.
The remarks come as the Fed begins a new chapter under Chair Kevin Warsh, who succeeded Jerome Powell.
Read more via CNBC
Bank of Canada External Deputy Governor Nicolas Vincent warned this week that Canada's labor market is undergoing structural change that monetary policy cannot fix, pointing to three converging trends: low turnover, rising long-term unemployment, and youth struggling to find work.
Long-term unemployment, defined as being out of work for six months or more, has reached its highest level in data going back to the early 2000s, outside of the pandemic.
The unemployment rate for Canadians aged 15 to 24 has climbed from a record low of 9% in 2022 to above 14%.
Young people now make up nearly a quarter of the long-term unemployed, a share that has more than doubled since 2022.
Vincent flagged a growing mismatch between the skills workers have and what employers want, noting job postings over the past two years have required more experience than ever before.
AI was cited as a "plausible structural explanation" for youth unemployment given its impact on entry-level roles, though Vincent said it was too early to confirm it as a major factor.
Low turnover is a sign that the labor market is less dynamic than it used to be. And this is not trivial: when it's more dynamic, it's better able to adapt to change."
Read more via Bloomberg
Initial unemployment claims rose 5,000 to 215,000 in the week that ended May 23, the highest level since mid-April, according to Labor Department data. Continuing claims, a proxy for the number of people currently receiving benefits, rose to 1.79 million.
Both metrics remain near historically low levels despite high-profile rounds of layoffs, particularly in white-collar technology roles.
The four-week moving average of new applications rose to 209,000.
The head of British retailer Next says youth unemployment in the UK has reached crisis levels, with employer cost increases and slowing economic growth squeezing the entry-level roles that give young workers their first foothold.
Next now receives 19 applicants for every shop job, up from 10 just two years ago.
The unemployment rate for 16- to 24-year-olds in the UK stands at 16.2%, the highest since 2014 and more than three times the overall unemployment rate of 5%.
Lord Wolfson attributed the squeeze partly to a government-mandated increase in employer National Insurance contributions, which he said raised Next's wage bill by £70 million per year, and cited upcoming employment law changes as likely to further restrict hiring.
Next has responded by reducing shop floor headcount and expanding automation, including self-scanning return lockers in place of till staff.
Read more via BBC
Despite widespread alarm about AI eliminating white-collar work, labor economists say the numbers tell a more complicated story, and a more cautious one.
Unemployment rates for occupations most exposed to AI are currently lower than for less-exposed jobs, and there is no large-scale evidence of workers shifting from AI-threatened roles to manual ones, according to analysis of BLS data.
Only one in five U.S. companies are using AI in any business function, according to Census data.
Stanford Digital Economy Lab research found a 16% decline in entry-level jobs in AI-exposed occupations such as software development and customer service for workers aged 22 to 25 since 2024, while head counts for older workers in the same fields grew.
It could be disruptive, but the data is telling us right now that disruption is not yet here, and we have time to plan."
The drop in young workers appears concentrated in jobs where tasks can be automated with minimal human involvement; jobs where AI augments rather than replaces workers saw faster-than-average head count growth.
Annual employment growth for coders has slowed by roughly 3% since ChatGPT's introduction, but overall coding employment continues to grow, according to Federal Reserve Board research.
Read more via MIT Technology Review
In his first so called “encyclical”, the new pope Leo XIV urged global regulation of AI and warned that prioritizing profit over employment violates human dignity. Prediction market traders on Kalshi appear to share his longer-term concern, placing 60% odds that U.S. unemployment will cross 8% at some point before 2030 and a 78% chance that AI is currently the number one reason for job cuts this month. (CNBC)
Speaking at a Commonwealth Bank of Australia conference, the OpenAI CEO said AI has not eliminated as many white-collar jobs as he had anticipated when ChatGPT launched in 2022. Altman attributed the gap partly to the irreplaceable "human part" of many jobs, citing his own experience using AI to respond to Slack and email messages before reverting to handling them himself. "I don't think we're going to have the kind of jobs apocalypse that some of the companies in our space advocate or talk about," he said. (Reuters)
Phoenix became America's back-office capital by offering companies cheap land and labor for customer service, data entry, and administrative work. Now those jobs are disappearing faster than the city's new tech economy can absorb the workers losing them.
The number of customer-service representatives in metro Phoenix fell 26% in the most recent four-year period measured by the Labor Department, from a pandemic-era peak of 92,970 in 2021 to 68,930 in 2025.
The Labor Department projects employment in office and administrative support will fall 4% over the next eight years, the steepest projected drop among all major employment categories.
Since 2019, large multinational companies have grown their offshore workforce by 36%, compared with 17% growth in domestic employment, with remote-friendly white-collar roles disproportionately affected, according to Revelio Labs.
New semiconductor and data center jobs are filling some of the physical space left behind, but employment services professionals say former customer-service workers rarely qualify for them without significant retraining.
Read more via The Wall Street Journal
The Trump administration has issued a new policy directing that most immigrants seeking permanent residence must apply through a U.S. consulate in their home country rather than adjusting their status from within the United States. The change affects more than one million people with pending applications and has significant implications for employers sponsoring foreign workers for green cards.
Under the new policy, adjustment of status, the process that allows visa holders already in the U.S. to apply for a green card without leaving the country, is now characterized as "extraordinary relief" to be granted only in exceptional circumstances rather than as a routine pathway.
H-1B and L-1 workers and their dependents are somewhat insulated due to "dual intent" provisions in immigration law, but holding those visa categories alone is not sufficient to guarantee approval.
More than one million legal immigrants currently have pending adjustment of status applications; immigration attorneys say the new guidance applies to all cases not yet approved, regardless of when they were filed.
Workers sent abroad to complete consular processing risk being unable to return if their applications are denied, and any approved employment authorization documents tied to a pending application would likely be revoked upon denial.
Legal challenges are considered likely, with attorneys citing potential due process concerns around retroactive application to already-filed cases.
This is a largely unprecedented move that will limit lawful immigration to the US greatly. People who followed the rules faithfully now face tremendous uncertainty."
Read more via BBC, Fragomen, Quarles
The average EU working week dropped a full hour over the past decade, falling from 36.9 hours in 2015 to 35.9 hours in 2025, according to Eurostat.
Greece logged the longest average working week at 39.6 hours, followed by Bulgaria and Poland at 38.7 hours each.
The Netherlands had the shortest at 31.9 hours, followed by Denmark and Germany at 33.9 hours each.
Skilled agricultural, forestry, and fishery workers had the longest weeks at 42.0 hours; elementary occupation workers had the shortest at 31.8 hours.
Read more via SIA
The Office of Personnel Management has proposed a government-wide nondisclosure agreement that would bar federal employees from sharing a broad range of "confidential government information." The draft notice was posted to the Federal Register Tuesday and will be open for a 30-day public comment period.
Individual agencies would decide whether to adopt the NDA.
The agreement would be technically voluntary, but employees who decline to sign could face removal from federal service and potential debarment.
The draft includes a carve-out for whistleblower protections and other laws permitting disclosures, but legal experts warn the broad language could still chill protected speech.
The proposed rule would not apply to federal contractors, who have been responsible for several notable leaks.
Read more via The Washington Post
Australia: Employer demand for apprentice and trainee roles fell 23% in 2025 and is tracking 21% lower again in early 2026, now well below pre-pandemic levels, according to Indeed. A fifth of all occupations have faced persistent shortages over the past four years, rising to 37% in the technicians and trades category, where apprenticeships are a common entry point. (SIA)
Japan: Half of Japanese workers say work-life balance has become more emphasized in society, but only about 20% report actually having more free time, according to a survey of nearly 2,000 workers by Persol's doda job service. The top barriers to achieving a better balance were lack of financial resources and physical and mental exhaustion. (SIA)
South Korea: Samsung Electronics workers ratified a wage agreement giving employees in its chip division access to substantial bonuses tied to the company's AI-driven profits, with semiconductor workers potentially receiving up to $430,000 in bonuses if the company hits $200 billion in operating profit this year. Nearly three-quarters of the roughly 62,000 workers who voted approved the deal. Workers in the consumer electronics division, whose bonuses are expected to be a fraction of their semiconductor counterparts', boycotted the negotiations and have said they will pursue legal action to challenge the outcome. (The New York Times)
United Kingdom: UK fintech job vacancies are forecast to grow nearly 14% in 2026, following 28% growth in 2025, with hiring concentrated in payments infrastructure, engineering, and compliance rather than consumer-facing neobanks, according to a report from Morgan McKinley and Vacancysoft. IT support roles have dropped from 17% to 9% of tech vacancies in two years as automation displaces traditional support work. London is expected to account for 71% of all fintech hiring. (Morgan McKinley)
