When the labor market sneezes, ADP, Paychex, and ManpowerGroup catch colds. The stock prices of all three sold off sharply as hiring cooled starting early last year (chart). But on balance, the latest batch of labor market data suggests that employment conditions may be improving, and employment-related stocks may be bottoming (chart).
We disagree with the widely-held notion that AI is a net job killer. In our opinion, AI will create jobs on balance. Humans will use AI to achieve greater output at lower cost, creating a wealthier society that needs more and newer types of human labor. We agree with Jevons' Paradox: Making a production input more efficient lowers the cost of the final product, stimulates demand for it, and ultimately results in greater demand for the input itself, despite the productivity gain.
