Listen to the article
In today’s edition:
- The labor market is holding-ish
- Inflation cools to an eight-month low
- AI is already creating winners and losers
If you are a fan of irony, please keep reading. I am using Claude to help produce The Beaker because, well, it’s 2026. I told it that I was fascinated by the fact that ChatGPT could not tell a user how many r’s are in the word “strawberry”, and I wanted to build around that. Here is a screenshot of its proposed opening:
🤦 I didn’t have the heart to tell Claude what it had just done. I smiled and nodded and asked to export the document, please.
AI is here. That’s not up for debate. It is undeniable, unnerving, unknown, uncertain, and unbelievable all at the same time. There will be pain felt in the market as we transition into this new world, but the optimists would argue that it simply means we can all do more - more capacity, more opportunity.
It is inevitable that AI will integrate into our daily lives, but that doesn’t mean humans can’t provide a good ol’ fashioned spellcheck once in a while.
🎯 What’s Stirring
The Labor Market is Holding-ish
The January jobs report came in better than expected: 130,000 jobs added, unemployment ticked down to 4.3%, and weekly jobless claims were at 212,000 - firmly below historical averages. On the surface, this looks like a solid and stable labor market that refuses to crack. But here's the “-ish”: 2025 job growth was revised dramatically downward, averaging just 15,000 jobs per month instead of the initially reported 49,000. That’s a huge gap.
Inflation is cooling, but it's not gone
January CPI came in at 2.4% year-over-year - an eight-month low, down from 2.7% in December. Monthly inflation rose just 0.2%, beating expectations. Shelter costs, the stubborn holdout for years, are finally showing signs of relief. Given this step in the right direction, and the strong job numbers, an interest rate cut seems increasingly unlikely in the first half of the year.
AI is Creating Winners and Losers
The Dallas Fed published a fascinating piece showing that AI is both aiding and replacing workers...at the same time. Wages in AI-exposed occupations are actually rising for experienced workers. In computer systems design, nominal wages have climbed 16.7% since fall 2022, more than double the 7.5% national average. But here's the flip side: employment for workers under 25 in those same fields is declining. It's not mass layoffs - it's a narrowing of the entry ramp. Young workers are finding it harder to land their first job in AI-adjacent fields because employers can now automate the tasks those roles used to handle.
📊 The Metric
Unemployment: 4.3%
CPI: 2.4%
Unemployment will be interesting to watch as the possible wave of AI-related layoffs takes place this year. Is there anything the interest rate can do about that?
One More Thing
Marc Andreessen was interviewed on Lenny's Podcast and made the case that the AI job-loss panic is "totally off base." The way he framed it: a job is just a collection of tasks. AI will take over some of those tasks, but it doesn't mean that all tasks disappear - they evolve. His advice for success in the AI era? "Don't be fungible." Worth the listen.
The Beaker is a bi-weekly briefing from PlanOmatic on the economy, housing, and the forces shaping both. Have something we should cover? Reply to this email.
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