Predictions on the stock market, economy and for new college grads : 2026 and the next few years
AI could double the US economy's growth rate over the next decade
https://www.zdnet.com/article/ai-could-double-the-us-economys-growth-rate-over-the-next-decade-says-anthropic/#ftag=CAD-03-10abf5f
This is a likely scenario I believe will play out - “AI could double the US economy's growth rate over the next decade” Till this article I’ve not actually seen any real data on this scenario studied or spelled out this way, at least not explicitly.
The next few years are going to get wild and super weird in unprecedented ways. Job opportunities for white color jobs are going to be torpedoed for a period of time and for many of those jobs as they exist today permanently. New jobs will get created but they won’t nearly keep pace with those being replaced by ai.
We are seeing big impacts of various forces on the job markets now especially for new grads. There are at least four major elements to this:
1) A big part is actually oversupply of new college grads for white collar jobs. There are more college grads than ever.
2) The whole job application and interview process has also become inundated with automation by LinkedIn and other sites causing huge issues for anyone trying to get an interview.
3) The unpredictable tariffs have made companies nervous about investing in new hires.
4) AI makes advances weekly towards being able to carry out knowledge work and is starting to create automation in the physical world through advances in robotics.
The problems in the job market today, especially for new college grads are multi-faceted. The first three would eventually sort themselves out. However with AI we have something unprecedented in human history. If commentators point out it is “just another tool like the loom, the cotton gin, the Internet” they’re not paying attention.
For large companies right now it doesn’t actually matter whether AI can do the job for that position to be eliminated. Leadership and their boards of directors believe that maybe if AI can replace a job they should eliminate the position and see what happens. That strategy is fully on display.
Meanwhile as the first linked article states companies are very likely going to become much more profitable. This will hold true if AI can continue to advance at even a modest pace much slower than we’ve seen.
The most notable and immediate trend is unemployment of new college grads will continue to skyrocket for white collar positions.
Given all of this, there are going to be headwinds in certain sectors of the economy dependent on the spending of disposable income by people in their twenties, but other segments will soar. We are likely not in a market bubble. Volatility may continue to increase, but the trending will be up for the foreseeable future at least until we either hit a hard limit on ai advancements or someone wins the super intelligence race. If the thrust of the study is to be believed, then these predictions is likely whether it comes a couple years sooner or later.
With the recent stock market gains over the past few years and the tech companies that are responsible for the majority of that seemingly overvalued I’ve often wondered if it would be better just to pull out. A diversified strategy continues to be a good path, but I think this article has solidified for me at least that it will be best to stay in the market and ignore the siren call of trying to time a bubble ‘pull out’ strategy so to speak.
What helpful messaging can be given to highschool and college students today to navigate these unprecedented times and developments?
1) Socialize! And probably do some binge drinking!
Actually don’t binge drink, but do socialize.
Developing social skills has literally never been more important in a world where that might be one of the few skills AI can’t replace. Kids are growing up with the option to often avoid real face to face interactions and the generation of kids caught up in the pandemic have that extra hurdle.
- Use and master the use of AI. As college kids approach graduation think about how future employers will want to leverage AI. Grads who can land an interview will have employers hoping for help in figuring out how to navigate this ai model landscape changing every few weeks. For the new jobs being created this mindset and skillset will be essential. These are table stakes if you will.
For parents of kids in high school and college: Start planning for kids to boomerang home as never before. Figure out how to set healthy boundaries and support the transition to adulthood proactively. Probably put off that plan to downsize the house a few years.