Corporate Profits Surge as Companies Cut Nearly 1 Million Jobs

U.S. corporate profits have risen to record levels this year as companies eliminated nearly 1 million jobs. Chen Zhao of Alpine Macro calls the disconnect a 'jobless boom.' Companies typically cut workers when profits decline. Amazon laid off 30,000 employees despite strong earnings. Zhao attributes the pattern to AI adoption boosting productivity across industries while reducing demand for workers. Labor demand has fallen to zero growth or mild contraction.

The Federal Reserve lowered interest rates in September and October after Jerome Powell noted concerns about layoff announcements from large employers. The Department of Labor suspended monthly employment reports when the government shutdown began October 1. ADP reported private employers added 42,000 workers in October. The unemployment rate stood at 4.3% in August. The rate has remained stable because the labor pool is contracting due to baby boomer retirements and reduced immigration under Trump administration policies. Art Papas of Bullhorn disputes the AI explanation and argues companies are recalibrating after pandemic overhiring.

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