Let's Get Surety #155 Economic Echoes: Predicting the Unpredictable
Mar 10, 2026
Chris Lafakis, Director at Moody's Analytics who forecasts macro, energy, and climate risks, joins to map the economic outlook. He discusses why 2026 looks stable. Conversation covers slower job growth, AI's early disruption to hiring, risks that could trigger a downturn, and how mortgage rates, housing, construction, and fiscal policy shape near-term prospects.
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Slowing Job Creation Lowers Unemployment Cushion
- U.S. job creation has slowed to roughly 25–50K per month, far below the historical 100–150K needed to keep unemployment steady.
- Chris Lafakis links this to reduced international in‑migration and demographic exits, which lower monthly labor force additions and ease needed job growth.
AI Dampens Professional Job Growth
- AI is reducing hiring in professional and tech sectors by raising productivity, so fewer workers are needed even as output rises.
- Lafakis notes tech employment declines and says AI-driven productivity gains explain part of the weaker job creation rate.
Trade Policy Uncertainty Has Moderated
- Trade policy risk eased since October as several countries reached agreements and signals suggested tariffs might be scaled back.
- Lafakis cites deals with India and Switzerland and pending Supreme Court review of the International Emergency Powers Act as clarifying forces.