What's Behind The Sinking Jobs Numbers

The latest jobs numbers for the U.S. economy sank like an Iranian ship. Payrolls plummeted by 92,000 in February, a shocking turn of events considering the stock market was anticipating a 59,000 gain in jobs. The results sent shockwaves through Wall Street as analysts searched for reasons for the shortfall.

Ironically, the data published by the  Bureau of Labor Statistics appeared three days after payroll processing firm ADP released figures showing private sector firms added 63,000 jobs in February. The discrepancy calls into question the credibility of government data, once considered the gold standard. 

Unsurprisingly, the news media, Wall Street and partisan politicians zeroed in on the government payroll numbers, since it reflected poorly on the Trump Administration.  The nabobs of negativism posited that tariffs are to blame for the miserable job performance.  

However, there are nuanced reasons that explain the economy shedding 92,000 jobs. Here are the major findings based on research and BLS data:

• Government jobs, which helped drive payroll growth under President Biden, have contracted.  The trend began in 2025 and has continued a downward spiral.
• Scores of American companies are laying off thousands of workers to offset massive record spending on Artificial Intelligence.
• AI is rippling through the economy, replacing tasks formerly done by workers.  More firms are imbedding AI deeper into their operations.
• U.S. firms are reporting higher rates of worker productivity, which reduces the pressure to hire more employees even as firms grow their business.
• Many of America's largest firms rapidly hired staff between 2020 and 2022 after COVID are changing course and slashing jobs to reduce costs after distorted post-pandemic economic growth. 

BLS data, cross-referenced with sources such as GovExec and Pew Research, shows the full-time federal civilian workforce grew by nearly 6% under President Biden.  Figures document the federal executive branch ticked up 5.5%, rising from 2.17 million employees to 2.29 million.

Overall federal employment, including postal workers, rose 4.8% from 2021 to January 2024.  Under President Trump, federal government employment has fallen by 330,000 jobs or 11% since the October 2024 peak.  Federal government hiring is no longer a factor in overall U.S. job growth.

Wall Street and some economists pinned the falling payroll numbers on jobs replaced by AI.  There is data to suggest that is true, but it is not as significant a factor as the impact of frenetic spending on AI at many of America's largest companies.  

Organizations are curbing headcount because of accelerating costs of AI capital expenses. To preserve profits and margins, firms must find ways to cut other expenses.  They are betting their AI budget-busting spending will lead to more corporate tasks being performed by AI tools. 

Some examples include tech giant Meta, which announced recently it is planning to jettison 20% of its workforce.  As of December 31, the firm had 79,000 employees.  Meta cited spiraling AI expenditures as the reason for the move.  Meta has hiked AI spending this year from $69 billion to $135 billion. 

Another corporate behemoth, Amazon, has stepped up its staff reductions, announcing layoffs totaling 16,000 corporate employees in January. Amazon is streamlining headcount while raising its investments in AI and data centers.  Amazon expects to spend $200 billion on AI this year. 

More companies are joining the race to boost AI spending, while trimming their workforces, including Oracle, Block, eBay Altassian and Autodesk. These U.S. companies and others are predicted to invest up to $700 billion in AI in 2026.  Worldwide the number is forecast to hit $2.52 trillion.  

Last year, numbers of U.S. firms directly pointed to their use of AI in announcing a 55,000 reduction in employees. That was 12 times the number two years ago, according to the outplacement firm Challenger, Gray and Christmas.  The trend is continuing during the first two months of 2026.

Examples include the chemical manufacturer Dow, which announced 4.500 layoffs, citing a simplification in its operating model that leverages AI and automation.  Salesforce is cutting 1,000 jobs as it continues to automate customer support jobs using AI.

Other firms embedding AI deeper into their operations while reducing head count include Nike, Pinterest, Angi and Chegg.  Global banking giant HSBC announced it is considering "significant" job reductions, which could impact 20,000 people worldwide as it accelerates adoption of AI.  

The rapid deployment of AI, coupled with other automation tools, is credited with a surge in U.S. productivity, which grew at a 2.8% annualized rate in the fourth quarter, the latest figures available. Productivity growth exceeded estimates, resulting in higher output with fewer hours worked.

This development is a positive sign for the economy because efficiency gains allowed companies to increase wages, up 1.4% in real terms for the year ending in February, 2026.  While wages rose, productivity put a lid on pressures to raise costs for products and services.

Another reason for the tepid job growth is the excess hiring by companies after the COVID pandemic. Once the scourge abated, businesses embarked on a hiring binge to accommodate a surge in buying by consumers.  Today's layoffs are the highest since the 2020 lockdowns.  

More than 1.1 million job cuts were announced in 2025, a 54% upturn from the same period in 2024.  Big Tech has led the layoffs, jettisoning 153,000 employees in 2025.  Job cuts in retailing and warehousing  are not far behind.  

A sharp correction in the labor market was inevitable after 22.1 million workers lost their jobs between January and April of 2020.  The discharges reached a zenith in March of that year when 13.5 million Americans found themselves out of work in a single month.  

There was bound to be a reset of employment after the post-COVID hiring binge. America's workforce now is undergoing structural and technological changes that likely will continue.  The disruption is not unlike what happened after the introduction of computers and the internet. 

Expect a slow incremental improvement in jobs throughout the remainder of 2026 with hiring picking up in the second half of the year. If the Federal Reserve delivers a couple of rate cuts, it will stimulate economic activity and hiring. Don't bet against America's economic muscle reversing the jobs trend.

Epstein Files: Politics Over Justice

The clamor over the Epstein files continues non-stop in the wake of the release of more than 6 million pages, images and videos. Democrats are demanding more files in the name of justice for victims.  But that's a red herring.  The party is desperately seeking a smoking gun to impeach President Trump. 

During Joe Biden's Administration, Democrats had zero interest in the Epstein documents. Not one Democrat called on Attorney General Merritt Garland to unseal the treasure trove of documents. That's why it's laughable now for the party to claim it has any interest in due process for victims.  

The documents would still remained locked away in the Department of Justice had not Attorney General Pam Bondi committed to release the Epstein information.  On February 21, 2025, Bondi was asked by Fox News--not by a Democrat lawmaker--if she could release the Epstein "client list."

Bondi responded: "It's sitting on my desk right now to review." Unfortunately for Bondi, she had little idea the firestorm she was about to unleash.  The "client list" was interpreted by news outlets to mean a document with the names of men who had sex with underage girls trafficked by Epstein.  

Disastrously for Bondi, the existence of a single "client list" has never been substantiated. In fact, Ghislaine Maxwell, who procured women for Epstein, denies any such list existed.  When Bondi produced no list, Democrats accused her of acting in bad faith. It was a classic political gotcha.  

The hyper partisan focus on the documents, videos and photos has not resulted in one conviction for sex with a minor.  If you want justice for victims, law enforcement would need evidence to file charges against abusers.  Democrats had their chance in 2021 to expose pedophiles.  

In that year, Maxwell was charged with six counts related to sex trafficking and conspiracy. The U.S, Attorney for the Southern District of New York filed the case and conducted the trial that resulted in a conviction on five counts.  Not once did prosecutors ask Maxwell to provide "client" names.

Maxwell recruited and groomed women for Epstein.  She traveled on Epstein's private plane--dubbed the Lolita Express--to Epstein's private island in the U.S. Virgin Islands.  Maxwell stayed at the mansion on the island scores of times.  There is no doubt she could produce her own "client list" from memory. 

Democrats should be reminded that Merritt Garland headed the DOJ at that time of Maxwell's prosecution.  Why were prosecutors unconcerned about learning the names of men who victimized girls?  After the trial,  prosecutors tried ducking the issue, claiming they wanted to keep the case "simple." Baloney.

That hasn't derailed Democrats--fueled by their Trump-hating base--from protesting Bondi's lack of transparency, even after the latest DOJ document dump of more than three million pages, images and videos.  Included in the documents are emails, flight logs, contact books and cards.

Whatever Democrats hoped to find, so far the data dump has exposed more people with connections to their party, including donors and former Democrat administration officials.  They view those references as collateral damage in a desperate bid for evidence to besmirch Trump.  

While Trump's name and image appears in the papers and photos, most are tangential references in media reports, news bulletins and analyses sent to Epstein from friends.  For context, former President Bill Clinton is mentioned scores of times in the materials and related court records. 

In addition, documents show that Clinton appears 26 times on Epstein flight logs, mostly international trips.  Clinton has steadfastly maintained he never visited Epstein's Little St. James Island. Government logs document that Epstein visited the White House at least 17 times during Clinton's presidency. 

CNN also reported that Maxwell was given an award by the Clinton Global Initiative in 2013 for her now defunct ocean preservation project.  

A review of the documents of the Epstein flight logs also show Trump's name appears on 7 to 8 flights.  Most were of short domestic flights. For instance, flights from Palm Beach to New Jersey.  None of the flights were routed to the infamous Epstein island.  

As investigative reporters and news organizations pore over the information, salacious references have ensnared more than a few politicos.  Some of the people include Hollywood elites in the music and film industry, former ambassadors and ex-officials in the Obama and Clinton administrations.

The dirty laundry list includes Larry Summers, former Director of the National Economic Council, for President Clinton; former Obama White House Counsel Kathryn Ruemmler; Microsoft founder Bill Gates; CBS News contributor Dr. Peter Attia, whose name and image appear more than 1,700 times.

The falling dominoes also have included the former Norwegian prime minister; the former UK ambassador to the U.S.; former Prince Andrew of the House of Windsor; the former president and CEO of the World Economic Forum; and the former Culture Minister of France.  

In the latest revelation, current Secretary of Commerce Howard Lutnick's name surfaces in privilege logs, email threads and witness-related materials.  The mentions largely are connected to social and business contacts, emails and visits.

For the sake of accurate reporting, it's important to remind readers that no evidence in the files proves criminal complicity in Epstein's trafficking activities for any of the individuals named herein. But in many cases individuals have stepped away from their current jobs after publication of their names.

In the midst of the hoopla, a nagging question confounds many Americans: Why don't victims come forward and publicly name their abusers?  Wouldn't that result in justice for the victims?   

The answer is complicated.  Not all women in the Epstein orbit were minors.  An unknown number were consenting adults.  In addition, many victims have settled cases against Epstein and signed non-disclosure agreements.  Others have moved on and don't want revisit the past horror.    

More than 140 women accepted payments from the Epstein Victims Compensation Fund.  The fund paid out $121 million.  J. P. Morgan reached a $290 million settlement with abuse survivors.  Deutsche Bank paid out $75 million.  Both banks did business with Epstein.  

In addition, the representatives of the Epstein Estate recently settled a victims' class action lawsuit for $35 million.  At the time of Epstein's death, his estate was valued at $635 million.  

No amount of money will make up for the shame and abuse suffered by women at the hands of the predator Epstein. However, the inconvenient truth is sexual abuse charges realistically aren't likely to be lodged more than two decades after Epstein allegedly hung himself in a jail cell on August 16, 2019. 

Speculation over Epstein's cause of death has also been resurrected after the recent document release.  A  2020 email indicates the medical examiner who oversaw the autopsy signed a confidentiality agreement and refers to the Epstein's death as a "murder investigation."   

This illustrates the pitfalls of a wide ranging release of documents containing tantalizing information without proper context. While the publication makes for titillating reading, there is little to be gained unless victims file charges.  

Democrats aren't the only ones beating the drums over the Epstein files. House Republicans have opened an investigation into the Epstein affair, heavily relying on the DOJ documents.  They subpoenaed Bill and Hillary Clinton in an act of political grandstanding.   

The GOP move will give Democrats the perfect opening to subpoena First Lady Melania and President Trump if the party reclaims the House in the midterms.  It is time for both parties to call a cease fire. More histrionics will not serve justice, the victims or the American public.