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Youth unemployment in the United States has climbed sharply in 2025. Economists and policy officials describe the pattern as a “no hire, no fire” phase, where companies mainly hold on to current staff, add few positions, and seldom cut jobs, rather than a sudden shock from artificial intelligence. Federal Reserve Chair Jerome Powell gave that view public weight at his regular press conference after the Federal Open Market Committee meeting. He called it an “interesting labor market,” noting that “kids coming out of college and younger people, minorities, are having a hard time finding jobs.” He pointed to a low job-finding rate paired with a low redundancy rate, “you’ve got a low firing, low hiring environment”, which makes it tougher than usual for first-time jobseekers to get in the door. Deutsche Bank has dubbed recent months “the summer AI turned ugly,” and some studies link AI uptake to pressure on entry-level hiring. Powell, however, said AI “may be part of the story,” while arguing the main drivers are a cooler economy and tighter hiring plans. Economists at Goldman Sachs and UBS soon echoed that reading, concluding that this is not primarily an AI event, at least not yet. On Friday, UBS chief economist Paul Donovan released an analysis titled “The Kids Are Alright?”  As reported by Fortune, he argued that the U.S. spike in youth unemployment runs counter to trends abroad and cannot be laid solely at the feet of automation. Decline in job reallocation slows opportunities Goldman Sachs economist Pierfrancesco Mei wrote on Thursday that “finding a job takes longer in a low-turnover labor market.” He examined “job reallocation”, the creation and destruction of roles, and showed it has fallen since the late 1990s, though more gradually in recent years. Today, most movement is “churn,” or switching among existing…

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Filed under: News - @ September 21, 2025 9:28 pm