Here’s the takeaway up front: in this job market, you have to prove yourself more than ever.

Friday’s jobs report was the last one before the midterm elections, and it was bad. Bad because it confirmed a cold labor market. No signs of large layoffs, but no signs of anyone getting hired either, and job growth was dismal.

This week on the Decode Econ podcast, Dr. Jeni Al-Bahrani joins me to talk about what that looks like on the ground. Jeni teaches the senior capstone at Miami University. In fall 2024, about 80% of her seniors had a job lined up before graduation. This fall, it’s about 30%. You are probably seeing the same at your university.

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Our economy is changing, and so are your students

Both Jeni and I have noticed a change in what students demand. During the podcast, we discuss the importance of midsemester evaluations. We highlight that students are more likely to say they want accountability; they want to be challenged, but when you hold them to higher standards, they push back. Jeni called them “Ouchie” moments. If you have noticed that your students, or new hires, are changing, this episode is for you.

We also talk about the three hours at the Apple Store, a lesson in switching costs, and a server who told us the pretzels don’t come with butter, not “in this economy.”

The Jobs Report

I talk about the jobs report in the podcast. Here is more on that and what you should know.

Employers added 29,000 jobs in September. Economists had expected 84,000. The unemployment rate ticked up to 4.2% from 4.1%.

And last month’s 162,000 new jobs? It was a blip. August came in hot because school years started a week or two later this year, and most of the gains were teachers. Once the data caught up, July and August were revised down by 60,000 jobs combined.

But stocks went up?!

Because a weak job market makes the Federal Reserve less likely to raise rates again. After the jobs report, prediction markets cut the odds of a hike at the October 27–28 meeting to 25%, down from 70% before the numbers came out (Reuters).

Let’s dig into the data

1. Who is getting the jobs?
Since January 2025, the economy created 930,000 new private jobs. Women got 813,000 of them. That’s nearly 9 out of every 10. The largest job gains were in health and education sectors, which traditionally are more women-centric.

2. Your wages aren’t keeping up.
If you got a raise this year and somehow feel like you have less money, this chart is why. When prices grow faster than paychecks, your real wage falls, even if the number on your pay stub went up.

3. The racial unemployment gap widened.
The gap between Black and white unemployment widened in September. While one month is not a trend, research has shown for years that Black workers tend to be the last hired and first let go when the labor market weakens. In a cooling market, this number is worth watching.

4. Long-term unemployment is climbing.
In September, 27.1% of unemployed people had been looking for 27 weeks or more. That’s more than 1 in 4 people searching for six months or longer. This is what a low-hire, low-fire market does. It doesn’t push many people out. It just keeps the people already outside waiting longer.

What does a cold market mean to you?

Companies aren’t laying people off, but they aren’t taking chances on anyone either. Investors are doing the same thing. Grad programs are becoming more selective, mostly due to funding. So whether you’re raising money for a startup, graduating in May, or choosing between grad school and a job offer, everyone is asking you the same question: Where’s the return? Show me the evidence that you are a safe bet.

If you’re a senior with an offer letter, celebrate, then keep going. Offers are getting rescinded at a higher rate, so keep your network warm until your first day (and beyond). And if you’ve been searching for six months, you’re one of that 27.1%. Stop sending the hundredth application and start with the people who already know your work. It is time to warm up your contact list again.

If you haven’t listened to the podcast, you do not want to miss this one

Apple and Spotify

Happy Econ Ed month!

Over the past couple of weeks, we have been running focus groups to learn more about the economic content you all love to read, listen to, watch, and engage with. Our Decode Econ Educator Network participants helped us learn more about what they want for their classroom. Our “1,000 true fans” focus group told us why they love us so much and what they would like to see more of. This helps us shape our work.

If you listen to us on a podcast platform, please give us a rating. It helps more than you know.

Now for the economics, here is what you missed this week

1. The Economic Degree is Worth It! Matt Holian, professor of economics at San Jose State University, discussed his latest paper with me on the Decode Econ podcast. Listen in (Spotify, Apple, or YouTube).

2. The BEA revised Q2 Real GDP up to 2.2% and Q1 to 2.5%. Inflation is down to 3.4%; excluding energy and food brings it to 3%.

3. DEEN member Dr. Mallika Pung shared insights from a recent study. Economists analyzed five years of data from software engineers at a Fortune 500 online retailer. They found that sitting near teammates increases code review feedback and improves code quality, especially for junior and younger engineers, but takes time away from senior staff, who write less code as a result.

   The TLDR: in-person work helps junior workers improve their productivity, and experienced workers are harmed.

   She provides slides and more context so economic educators can incorporate this study into their classes. Thank you, Dr. Pung!

   

4. This post about Social Security reform from our friends at is worth a read. It starts with

   “When it comes to Social Security reform, Democrats have traditionally been against benefit cuts and Republicans have been against tax increases. But one side of that balance is starting to shift. Over the past few months, several Republicans have come out in favor of payroll tax increases to bolster the program’s trust fund, including Sen. Bernie Moreno (R-OH), Rep. Tom Cole (R-OK), and Rep. Lloyd K. Smucker (R-PA).”

   The visualizations are worth it. Check it out.

5. Finally, the Employment Situation Report (Jobs report) comes out at 8:30 am. Reminder: last month’s data was a surprise. Was it a data anomaly, or will the trend continue?

Your boss sat you down and told you you did a fantastic job this year. Your performance has earned you a 3% raise.

Your paycheck is bigger. So why doesn’t it feel like it?

Because prices rose faster than your pay. Inflation over the past year was 3.4%. If you make $60,000, your raise was $1,800, but just keeping up with prices would have taken $2,040. You’re about $240 behind where you were last year. Your boss praised you and cut your pay in the same meeting.

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That’s why October matters to me. It’s National Economic Education Month; it’s our chance to celebrate economic literacy and the work we do together to improve our understanding of economics. Economics is more than memorizing graphs and equations; it is understanding how changes in this complex economy impact you and how you can better advocate for your needs. It helps you anticipate what markets will do and prepare your family for the storm. When politicians, both Democrats and Republicans, make promises, you can analyze them for economic merit, not feelings. Economic understanding is critical for success in today’s economy.

At Decode Econ, we are fully committed to this mission. We believe economic literacy isn’t just for K-12 or college students; a strong understanding of economics supports business decisions, strengthens social initiatives, and informs policy design. It helps you become a better citizen.

So here's my ask for October. Forward this to one teacher you know. Or reply with the one economic idea you wish someone had explained to you sooner. Let’s work together to improve economic literacy. Thank you for all the support and for being on this journey with us.

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The Bureau of Economic Analysis (BEA) just revised second-quarter Real GDP growth upward to 2.2%. The previously released estimate of 1.5% was lower than we had expected and raised concerns about the state of the economy when it was released. They also revised Q1 data up to 2.5% from 2.1%. The new figures align with long-term growth trends for the U.S.

Consumer spending is driving the shift upward. Consumer spending, which accounts for nearly 70% of U.S. GDP, rose 3.8% in Q2. Although consumer confidence has dropped to its lowest level since 2014, U.S. consumers remain resilient in their spending.

Real GDP growth came from real estate, information, durable goods manufacturing, and finance and insurance.

Inflation

We also had good news on inflation. The Personal Consumption Expenditures, the Federal Reserve’s preferred inflation measure, came in at 3.4%. This figure was below expectations and continues the trend of decreasing inflation (disinflation, not deflation).

This week on the Decode Econ Podcast, I sat down with Matt Holian, an economics professor at San Jose State. When Matt was department chair, he needed an honest answer to the question every recruiter gets: what jobs do econ majors actually get? He went looking for the data.

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Using American Community Survey microdata, Matt and his coauthor Kevin Chiu tracked mid-career econ grads (ages 35 to 45, bachelor’s as their highest degree) into the jobs they actually hold. Their paper came out this year in the Journal of Economic Education.

Here’s what jumped out at me:

• Economics is a top-10 earning major, with a median income around $105,000. Seven of the other nine are engineering fields.

• A quarter of econ grads land in five occupations: managers, financial managers, chief executives, accountants, and personal financial advisors. The other three-quarters are everywhere. Analysts. Sales. Software developers. Teachers.

• Econ grads working as securities and financial services sales agents earn a median of nearly $298,000.

• 11.1% of econ majors are self-employed. That’s one of the highest rates of any major.

So is the degree doing the work? Matt was careful here, and I respected it. The data can’t tell you that. Economics may attract people who are already comfortable with risk, and those people might have done well in any major. That might be a selection issue.

We also got into his textbook, Data and the American Dream, which teaches econometrics by having students replicate real published studies using free software.

If you’re a student picking a major, a parent paying for one, or a professor who keeps hearing “what can I even do with this?”, this episode is for you.

Resources from the episode

The research

• Earnings, occupation, and college degree: A focus on the economics major (Holian & Chiu, 2026, Journal of Economic Education). The analysis code is archived on OpenICPSR, and you can modify it to look up the top jobs and earnings for any college major.

• Methods in open policy analysis: An application to California’s building energy codes (Holian, 2023, Contemporary Economic Policy). Extends the cost-benefit analysis from Chapter 2 of his book. Replication package here.

  Holian, M. J. (2023). Methods in open policy analysis: An application to California's building energy codes. Contemporary Economic Policy, 41(4), 613-628.

The books

• Data and the American Dream: Contemporary Social Controversies and the American Community Survey(Holian, Palgrave Macmillan/Springer). Matt’s advice: check your library before you buy. Many university libraries give you the full PDF free through SpringerLink. Replication files on OpenICPSR.

• Mastering ‘Metrics by Joshua Angrist and Jörn-Steffen Pischke. “The most undergrad-friendly econometrics book out there”, with the same notation as Matt’s book, so the two pair well. Angrist’s free Mastering Econometrics video series pairs well.

The data (all free)

• American Community Survey via IPUMS USA. The largest household survey in the U.S., with college major, occupation, and income.

• Current Population Survey via IPUMS CPS. The monthly survey behind the unemployment rate.

• Historical U.S. Census data via IPUMS USA. Goes back to the 1800s with consistent coding.

• ipumsr, an R package that pulls IPUMS data straight into R.

The tools

• Posit Cloud. Run R in your browser with nothing to install.

• OpenICPSR. A free archive where researchers post the data and code behind published studies.

Find Matt: mattholian.com

For economics educators: Matt is exploring an edited volume that expands Data and the American Dream to other IPUMS datasets, one chapter per contributor. If that’s you, reach out to him.

Decode Econ grows when readers share it with people they trust. If this edition made something click for you, pass it along. That’s how this works.

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Time to catch up on what you missed.

1. The podcast with Dr. Patel (YouTube and Spotify)

2. Why Your Amazon Receipt Looks Different: It Is Economics

3. Cincinnati Is Ohio’s Biggest Economy. It Still Didn’t Crack the Top 15.

4. The Bond Market Problems Continue

Which post did you find most interesting or helpful?

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The U.S. 30-year Treasury yield hit 5.48% this week, the highest since 2004. And it’s spilling into the rest of the economy: the average 30-year mortgage is above 7% for the first time in about two years.

Today, I'll discuss why this is happening and why you should care.

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What is a bond, really?

When you buy a U.S. bond, you’re lending money to the U.S. government. In return, the government promises to pay you interest.

Here’s an example. You buy a $100 bond that pays 4%. That transaction means that you lent the government $100, and it will pay you $4 a year. That $4 is locked in and won’t change.

But the bond itself is an asset, and you can sell it in the market. Suppose the market cools on U.S. bonds and therefore the price falls. If you sell your bond to me for $90, I still collect $4 a year. Except now I’m earning $4 on $90, which is a 4.44% yield.

That’s why bond prices and yields move in opposite directions. When yields rise, it means investors will only buy bonds at lower prices. So the real question is: why won’t they pay more?

What’s causing the shift?

Three things are driving this.

1. Inflation fear is back. CPI has come in hot for the last couple of months, and markets are worried inflation is here to stay. That same fear pushed the Federal Reserve to raise rates last week, and markets expect another hike this fall. Put yourself in an investor’s shoes. Why lock up your money for 30 years at today’s rate when short-term rates keep climbing and inflation keeps eating into your payments? You won’t, unless the long-term bond pays you more to take that risk.

2. There’s a lot more debt to sell. The government has shown no fiscal restraint. It keeps borrowing, so it keeps selling Treasuries. When you flood the market with bonds, prices fall even if demand holds steady. And Washington isn’t the only one borrowing. Tech firms are issuing corporate bonds by the billions to keep feeding the AI machine, and they’re competing for the same investors.

3. It’s global. Germany’s 10-year yield hit a 17-year high. Japan’s hit its highest since 1996. If investors were just fleeing the U.S., money would pour into those bonds and their yields would fall. They’re rising too. What we’re seeing is a global distaste for long-term commitments.

What does a rising yield mean for other markets?

The 10-year and 30-year Treasury yields are the base rate for a huge share of the economy. Every loan priced off them moves too.

• Mortgages. Lenders set mortgage rates off the 10-year Treasury. On a $400,000 loan, going from 6% to 7% raises the monthly payment from about $2,400 to $2,660. That’s an extra $263 a month, or more than $3,100 a year, for the same house. Fewer buyers can make that work, and the mortgage brokers I’ve talked to are already feeling it.

• Stocks. When a Treasury pays over 5% with basically no risk, stocks have to work harder to win your money. Higher yields also shrink what future profits are worth today. That’s why growth stocks tend to feel this first. Check out the market over the past couple of weeks, it has felt the pain.

• Business borrowing. Companies that borrow to expand, hire, or refinance now face higher costs, and some of those projects stop making sense. The riskiest borrowers get hit hardest. Small businesses and early-stage firms will have to fight for funding.

• The government’s own bill. This is the loop that worries me. Higher yields mean the government pays more interest on new debt. More interest means bigger deficits. Bigger deficits mean more bonds to sell, which pushes yields up again. And every dollar spent on interest is a dollar that doesn’t go to education, healthcare, or anything else.

Dr. A’s Take

Last month I argued the government’s bond buyback backfired because it signaled to markets that Washington was nervous. I think this week shows the problem runs deeper than messaging. Inflation, deficits, and a war are pushing long-term rates up worldwide. I don’t see long rates coming down quickly until one of those three pressures clearly eases, and right now none of them is.

What it means for you

If you’re house hunting and waiting for rates to “go back to 6%,” I wouldn’t build your plan around that happening this year. Figure out what monthly payment you can afford at 7% and shop within it. If rates do fall later, refinancing is an option. Planning around a guess isn’t.

More importantly, I am concerned that the Bond market blues will spill over into other markets and lead to an economic slowdown. It will be an interesting fourth quarter of 2026; how it is managed will shape a lot of what we will expect for 2027.

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Monster just released the list of best cities for young professionals. Cincinnati didn’t make the list, but five other Ohio cities did. Columbus ranked #7 on Monster’s new list of the best U.S. cities to build a career. Cincinnati ranked #26.

Cincinnati has more workers and a bigger economy than Columbus. A Huntington Bank analysis released in March found Cincinnati now employs 1.16 million people, compared with Columbus’s 1.15 million, and produces $198 billion in GDP versus Columbus’s $182 billion.

I teach early-career professionals in the Cincinnati metro, so when I saw that gap between the economic data and Monster's report, I wanted to know what actually explains it. I will cover the list of Ohio cities, the index, and what it means for Cincinnati. I will end this post with a limitation of this measure.

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Ohio Tops the List

Five Ohio metros made the top 10, more than any other state:

• Akron at #2

• Dayton at #3

• Cleveland at #5

• Toledo at #6

• Columbus at #7

Cincinnati, the state’s largest economy, isn’t on that list. Here’s why.

Monster’s Build-a-Career Score

Monster’s Build-a-Career Score is a simple average of two equally weighted measures: a Career Opportunity Score, which measures job postings relative to the size of the local labor force. It is normalized from 0 to 100 across all 100 metros in the study. The other measure is a Rental Affordability Score. It uses May 2026 Zillow rent data and is also normalized from 0 to 100, where cheaper rent scores higher.

Cincinnati’s numbers:

• Career Opportunity Score: 64.0

• Rental Affordability Score: 82.1

• Build-a-Career Score: 73.0, which is (64.0 + 82.1) ÷ 2

On Affordability and Opportunity

A Rental Affordability Score of 82.1 puts Cincinnati in line with Columbus’s 84.2 and well ahead of pricier top-15 cities like Charleston (64.1). For Cincinnati, Career Opportunity is the problem. A 64.0 is dead last among Ohio’s six largest metros, behind Dayton (78.3), Columbus (77.1), Cleveland (75.4), and even Toledo (68.8).

Here’s how much the Career Opportunity Score costs Cincinnati. Swap in Columbus’s Career Opportunity Score of 77.1 and Cincinnati’s Build-a-Career Score jumps to roughly 80.6, statistically identical to Columbus’s actual 80.6.

So what does that variable actually measure? It doesn’t measure how many jobs exist in Cincinnati. It measures how many job postings are open right now, relative to how many people are in that city’s labor force. A labor force of over a million needs a proportionally larger number of active postings just to post the same ratio as a metro a third its size. Dayton doesn’t need many new openings to move its score, but Cincinnati does.

More on this data limitation below.

Cincinnati’s Changing Landscape

It gets worse when you look at how Cincinnati’s labor market is changing. Cincinnati’s two most recognizable headquartered employers shrank their labor force in the second half of 2025. P&G announced up to 7,000 non-manufacturing job cuts in June 2025, about 15% of that workforce, phased in over two years. The company employs roughly 10,000 people in Cincinnati and, at the time of the announcement, hadn’t said how many of those cuts are local. Two months later, Kroger announced nearly 1,000 corporate layoffs, about 200 of them in downtown Cincinnati, alongside 60 store closures over the following 18 months.

Young Professionals and Economic Development

Thriving cities across the U.S. have something in common: they have large populations of young professionals, or they actively recruit them. This is where the Cincinnati metro is struggling and needs to do better.

On a recent visit to Chicago, I couldn’t help but notice how much downtown activity catered to young professionals, whether it was stereotypical young-professional bars or running clubs and riverfront walks. I didn’t investigate rental rates, but I’d guess Chicago has a range of rental unit types and price points to accommodate different pay levels. It also has public transportation infrastructure that lets people commute into the city without owning a car, allowing young professionals to take advantage of cheaper rent outside of the city center. Eliminating car expenses also saves young professionals a lot of money; with good public transportation, they can avoid gas, insurance, parking, and maintenance.

Moreover, Chicago firms target universities to recruit interns from across the Midwest. They strategically attract young professionals and early-career employees. Spend a summer walking around the Loop, and you can’t help but notice all the college interns visiting. Young professionals eventually become midcareer employees, then upper management and C-suite leaders.

This is where Cincinnati struggles. It doesn’t cater to young professionals; it assumes they’ll be here by default. Policies, activities, and entertainment dollars target midcareer and older professionals. Economic development efforts focus on attracting large firms and their C-suites. That makes sense: those firms bring high salaries and a large tax base. But that recruitment strategy is expensive, and it has to be maintained indefinitely to keep working.

A young professional population brings spending dollars, energy, the arts, and most importantly, innovation. That’s what’s missing in the Cincinnati metro, including Covington and Newport across the river: a targeted approach to recruit and retain young professionals.

If Cincinnati wants to become a thriving economic power, it needs a real strategy for making itself attractive to younger professionals. I want my students to choose Cincinnati not because it’s home, but because it’s exciting and the opportunities to grow here are abundant. We need to improve the value proposition for why they should pick Cincinnati.

Thank you for sharing this post with your community. Informed consumers and employees improve market outcomes for all.

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Limitations

Like any other data, the methodology matters. There is a lot to pick on with this data, but I will focus mainly on Career Opportunity Score.

Job postings- The press release does not make it clear how job postings were measured. The data source matters; the number of postings may vary by season and geography. Finally, in the economic development industry, job postings do not always approximate job openings. Relying on job postings as a measure of job opportunity will bias the data downward, especially in areas where large firms might be hiring multiple positions using the same job posting.

Monster also states that its Career Opportunity Score “does not measure wages, job quality, or individual career outcomes.” Therefore, treating every job posting equally may not be the best way to measure career opportunities.

Sources cited

• Monster.com. (2026, August 3). Best Cities to Start a Career in 2026: Top 100 U.S. Metros.

• Huntington Bank regional economic analysis, reported via Yahoo News (2026, March). Cincinnati region overtakes Columbus as Ohio’s employment king.

• Entrepreneur. (2025, June 5). Procter & Gamble Layoffs: 7,000 Jobs Affected, Corporate HQ.

• WCPO Cincinnati. (2025, August 26). Kroger to lay off nearly 1,000 corporate workers, including some downtown Cincinnati employees.

You may have noticed your Amazon receipts and order confirmations look different lately, and it has a lot to do with AI and competition.

If you don’t understand why, you might think it’s “one of the worst changes to customer experience,” as one Reddit user put it.

What Happened

Earlier this summer, Amazon started sending out generic descriptions of orders in its receipts and confirmations. Order your favorite dairy-free protein, and the receipt now just says “pantry item.” You have to open the Amazon app to find out what you actually bought.

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The Economics

Let’s break down the economics behind this change.

1. Email providers are competing with Amazon for your shopping data. Gmail now scans your email with AI, and it also runs its own shopping business, putting it in direct competition with Amazon. If Amazon’s receipts tell Google what you bought, Google can build a shopping profile on you. Google’s “Universal Cart” is designed to watch what you search, what’s in your inbox, and what you watch on YouTube. It’s no longer just about your Google search history. With that data, Google can start targeting you with competing products and offers. Amazon is keeping receipts vague to protect its own turf. This is a company fighting off a competitor.

2. Amazon wants you inside its app, not your inbox. Every time a vague receipt sends you back to the app to figure out what you actually ordered, you’re one screen closer to buying something else. It’s inconvenient for you, but that’s the point. It increases the odds you make another purchase while you’re there.

3. Amazon says this is about privacy. Here’s how an Amazon customer service email explained it:

“This change was implemented to help protect your personal information, particularly for sensitive or personal purchases, and to minimize the risk of package theft by not disclosing the specific contents of your shipment in publicly visible communications. Additionally, since many Amazon accounts are shared among family members, this approach helps maintain confidentiality for gifts, surprises, or personal items you may not want others in your household to see. It also ensures consistency across various product categories and aligns with broader data privacy practices to safeguard your purchase details.”

Users are complaining that their financial budgeting apps can no longer scan their email for receipts and build a spending profile. This also affects financial behavior.

Dr. A’s Take

This is economic competition playing out in real life. Three different justifications, and each one is a business protecting its edge. Each explanation has real trade-offs, but make no mistake: Amazon is adjusting because it has to compete.

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In a classroom, I can teach you how the world is supposed to work. Study abroad shows you how it actually works. Dr. Darshak Patel joins me to talk about taking students to Kenya to watch a universal basic income program up close, and why he would rather learn a new country alongside his students than teach one he already knows.

Dr. Patel is an Associate Professor of Economics at the University of Kentucky. We met there as graduate students. Since then, we have written many papers together, co-founded The Econ Games, and continue working to make economics accessible to students. It was fun having him on the podcast.

In this episode, we cover

1. The importance of global education and how to get started

2. How the Econ Games started

3. The importance of community in economics

Show Resources

1. Al-Bahrani, A. A., Holder, K., Patel, D., & Wooten, J. (2016). Art of econ: Incorporating the arts through active learning assignments in principles courses. Journal of Economics and Finance Education, 15(2), 1-16.

2. Darshak’s previous podcast appearance

3. The Fed Decision

4. Al‐Bahrani, A., & Patel, D. (2015). Using ESPN 30 for 30 to teach economics. Southern Economic Journal, 81(3), 829-842.

5. Once Brothers Documentary

6. Patel, Darshak (2019). “Assignments to Engage Students in Economics Study Abroad Programs” Perspectives on Economic Education and Teaching. Ed. 1, pp. 53-62. Springer, Cham.

7. Patel, D., Al-Bahrani, A., & Hoyt, G. (2024). Facilitating Authentic Practice and Content Acquisition Through Competition: The Econ Games.The American Economist, 69(2), 288-300. https://doi.org/10.1177/05694345241261554

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What happens when a neighborhood gets access to electricity? We would expect people’s quality of life to improve and for them to feel safer. So why did these economists find that rural electrification increased intimate partner violence (IPV)?

Roughly, 30% of women in India report experiencing intimate partner violence. Most of the research in this field focuses on cash transfers, legal reform, and information campaigns to empower women. However, no one has looked at streetlights. Shreyasee Das and her coauthors asked: Does putting a household on the grid make women safer, or more exposed to risk?

In this conversation, development economist Shreyasee Das (Temple University) works through her paper on rural electrification in India, part of her “Lights On for Safety” research. The outcome is ambiguous. Does electricity increase independence and bargaining power inside the house, or does it lead to more exposure once women move through public space? That ambiguity is what makes for good research.

Resources

Das, Shreyasee, Sayli Javadekar, & Narbadeshwar Mishra. “Lights On for Safety: Evaluating the Linkages Between Electrification and Violence Against Women.” Working paper.

I am resending this email because I trust you not to make mistakes. An earlier version of this newsletter had a mistake: the Fed raised rates, not cut them. Sorry for that.

We've had a lot of activity this week, and we have been busy sharing economic stories.

Here is what you missed this week.

Subscribe now

The podcast discussion with Dr. Shreyasse Das and Dr. Amrita Dhar on Development Economics. You do not want to miss this one. We also discussed their experience at the University of Houston’s Ph.D. program.

Why I would hate to be Kevin Warsh and the political pressure the Fed faces. Yes, the Fed raised rates ( earlier version had a typo; I apologize), and they should have given the economic conditions. However, most of the inflation pressure comes from energy prices, and now we will all face a higher cost of capital, another consequence of the war on Iran for the American public.

This video covers

1. Inflation data
2. Gas Prices
3. Bond Markets
4. The FED meeting this week and what all that means to you

We want to hear from you: what economic stories have you been following, or what do you want us to cover?

Leave a comment

A little teaser from our podcast conversation

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I am resending this email because I trust you not to make mistakes. An earlier version of this newsletter had a mistake: the Fed raised rates, not cut them. Sorry for that.

We've had a lot of activity this week, and we have been busy sharing economic stories.

Here is what you missed this week.

Subscribe now

The podcast discussion with Dr. Shreyasse Das and Dr. Amrita Dhar on Development Economics. You do not want to miss this one. We also discussed their experience at the University of Houston’s Ph.D. program.

Why I would hate to be Kevin Warsh and the political pressure the Fed faces. Yes, the Fed raised rates ( earlier version had a typo; I apologize), and they should have given the economic conditions. However, most of the inflation pressure comes from energy prices, and now we will all face a higher cost of capital, another consequence of the war on Iran for the American public.

This video covers

1. Inflation data
2. Gas Prices
3. Bond Markets
4. The FED meeting this week and what all that means to you

We want to hear from you: what economic stories have you been following, or what do you want us to cover?

Leave a comment

A little teaser from our podcast conversation

I think this is a mistake. Inflation remains high because of energy prices. Neither of which is due to overall demand. It’s war- and AI-induced. Increasing interest rates will hurt everyone. It might help a bit with AI's demand for energy, but it won’t change energy prices driven by the war.

The Fed is in a tight spot; they have to raise interest rates to show they mean business on inflation, but the rest of the market will be impacted by that decision.

This is a test for Chair Warsh; let's see how it plays out.

As an economist, I have been following recent data and market trends, and I want to tell you what I am seeing. It isn’t looking good, and it’s going to get worse

In this video, I cover

1. Inflation data- CPI is still elevated, and energy prices are to blame

2. Gas prices are above $100 per barrel, and Diesel is above $6 a gallon

3. Bond Markets- Yield pressure is now on shorter term bonds too. Mortgage Rates are increasing; they are above 7% for a 30-year fixed mortgage.

4. The FED meeting- They are in a difficult situation; raising interest rates won’t solve the problem we are facing, but the Fed has to signal that they care about inflation.

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In today’s discussion, I sat down with two economists I think highly of: Dr. Shreyasee Das (Temple University) and Dr. Amrita Dhar (University of Mary Washington). Dr. Dhar tracks capital flows into emerging markets and examines how U.S. states split the bill for K-12 schools. Dr. Shreyasee Das studies what happens inside a household in rural India after the “lights come on”.

Shreyasee’s research on rural electrification found that as women gained more independence, information, and control over their own lives, fertility dropped, but in some households, so did stability and safety. Listen in to learn more.

Not Just Poor Countries

Development economics isn’t just a lens for poor countries. Dr. Das reminds us that Flint’s water crisis, schools without air conditioning, and sewage problems in the rural South are problems development economics can study locally.

Both are graduates of the University of Houston’s Ph.D. in Economics. We discuss their experience as graduate students and their transition to academia.

Check out the podcast and tell us what you think!

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Resources

Amrita’s Resources

1. Poor Economics by Abhijeet Banerjee and Esther Duflo https://amzn.to/4cIhgFd

2. Analytical Development Economics - Kaushik Basu https://amzn.to/4cBAQTG

Shreyasee’s Resources

1. Amartya Sen’s Capability Approach Amartya Sen’s Capability Approach https://amzn.to/4gXNf5C

2. Amartya Sen’s Tanner Lecture #1: Equality of What https://tannerlectures.org/lectures/equality-of-what/

3. Amartya Sen’s Tanner Lecture #2: Standard of Living https://tannerlectures.org/lectures/the-standard-of-living/

4. Women’s Role in Economic Development by Ester Boserup https://amzn.to/4AbIJsZ

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Here are some of our posts that you might have missed this week; today is a great day to catch up on Decode Econ.

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The Podcast- the conversation on AI in education and its impact on learning with Dr. Shishir Shakya has sparked some discussions in the comments, and I have heard from several of you. It was an insightful conversation, and it was encouraging to hear how some educators are welcoming this technological change.

How the K Economy Gets Worse- In this post, I connect the dots between the widening gap in the K economy and firms shifting their focus away from the low-profit customer. In today’s economy, firms can be profitable by solely focusing on wealthy consumers. While this makes good business sense, it ignores the social cost of removing a stepping stone to asset accumulation. We see it in housing, cars, and the airline industry; firms are eliminating the low-profit products.

The Jobs Report Breakdown

The jobs report was surprisingly positive, but it also raised questions and fears about the drastic revision numbers. Economist shared on Twitter (or X) some of her thoughts on how to think about the revisions. In this video, I cover the jobs report and highlight the discussion around the revisions. Watch the video to learn more.

We Want to Hear From You

Finally, is it a Bribe?

It shows changes in Canadian trade with the United States and the rest of the world. It tells us a lot about what economists fear about trade wars and tariffs.

Total Canadian exports were relatively flat in 2025, at around $780 billion. Exports to the United States fell by 5%, roughly $30 billion, to $566 billion. At the same time, exports to the rest of the world increased by 16%, from $185 billion to $214 billion.

This is a good example of how trade partners shift their behavior to avoid working with tariffs.

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How Did We Get Here?

A reminder of what this administration’s tariff proposal was presented as

1. Protect U.S. producers

2. Bring manufacturing home

3. Generate revenue for the U.S. Treasury

4. Protect the U.S. consumer from being taken advantage of

Even taking that at face value, and assuming good intentions, economists were clear that this policy would not work. Canada is proof.

The Economics

Tariffs are a tax on domestic consumers of imported goods. They increase the cost of the goods and encourage consumers to substitute away from the good or pay a higher price. Producers also face costs; they either lose customers or receive lower revenue because of the tariffs. Either way, this creates an incentive to find new customers, especially if relationships between trade partners become contentious.

A decade ago, 80% of Canada’s exports went to the U.S. Since Trump took office, Canada has spent that time finding other buyers. They have built relationships with other countries to reduce reliance on the U.S. Today, the U.S accounts for 60% of Canada’s exports. This is a great example of trade diversion. When trade becomes more expensive and the relationship less reliable, partners shift their behavior and find new customers that treat them better.

So what does this mean for the economic promises?

1. Tariff revenue, if collected, will be lower than anticipated because the economic base has shrunk

2. Customers lose because American consumers lose access to Canadian goods they used to value, and if they get access to them, they have to pay more.

3. Reshoring is a long-term capital investment. Companies don’t build plants based on 4-5 year forecasts; they need to forecast 20-50 years out. This administration’s trade policy doesn’t clearly indicate that its position will be a long-term U.S. policy.

4. U.S. producers aren’t really winning because the current trade policy doesn’t account for retaliatory tariffs that make it harder for U.S. producers to reach international markets.

Economists modeled this from the start. Tariff wars don’t produce winners; they produce redirected trade, foregone revenue, and a permanent break in relationships that had previously made us all better off.

From Marketplace

The low-profit consumer has historically been a loss leader. Firms sell them a product below the cost of production, hoping they will become future consumers who buy higher-profit products.

This shift is both economic and financial, and it affects you and our society as a whole. We must address it to help solve the affordability crisis.

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Shifting Trends

As firms face increased pressure from tariffs, competition, and a greater emphasis on market gains, they are more likely to drop the entry-level option. Fewer options make it harder for you to enter the market.

Take a look at what just happened with Volkswagen. Volkswagen’s board approved a cost-cutting plan that would cut 50,000 jobs and reduce its model line by half. The CEO said this was due to tariffs, as expected, and increased competition from Chinese automakers.

It is not clear which models will be cut yet, but based on what is happening in the market, I predict it will be entry-level models with smaller profit margins.

Housing

We have seen this happen with housing. Since 1980, the average home has grown from 1595 to more than 2600 sq. ft. in 2015. The average number of bedrooms has increased to 4. Firms focused on the premium home, and dropped the entry level option with low profit margins.

As the affordability crisis has taken shape, home sizes have dropped. The average (mean) square footage for new single-family homes built in 2025 was 2,405 square feet.

The K-Shaped Economy and Age

The K-shaped economy is closely tied to age. Wealth accumulation has been mostly stock market-driven, which rewards people with stock market portfolios. Older Americans have benefited the most. Since the 1980s, the mean net worth relative to the average household has increased for those 75 and above while it has decreased for those 35 and below.

For the Young

You are seeing attention shifting towards the old and rich. This wealth concentration lets firms focus on that segment of the economy without hurting their bottom line. Unfortunately, firms are reluctant to cater to low-profit segments. However, this segment needs to start accumulating assets and needs to gain access to more affordable options. The entry-level home and entry-level car are both parts of the financial growth experience I was able to leverage, but I don't see those options available to young consumers today.

Dr. A’s Take

Firms’ actions make total sense here. With limited resources, it is efficient to deploy them toward high-profit products and services. However, eliminating the entry-level, usually low-profit segment has social consequences. This becomes a bigger problem when this trend correlates with age, squeezing young people out of taking their first steps toward financial freedom.

Will we see more firms emerge to address this problem?

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AI is disrupting our world. Nowhere is this more evident than in education, especially higher education. How will our students learn? How will we assess them, and how will we teach them in this new technological environment?

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These are all questions I have received as an administrator and as an economic education researcher. To join this conversation and learn how some faculty are adjusting, I reached out to Dr. Shishir Shakya, Assistant Professor of Economics at Appalachian State University.

Shishir has redesigned all his courses—he teaches econometrics and statistics—to answer one question: what happens if we stop preparing students for the job market of 2022 and start preparing them for 2028?

Timestamps

• 00:49 – Intro: How AI is disrupting education

• 02:17 – No homework, no midterms, no finals — what replaced them

• 11:22 – The moment AI broke his old teaching model

• 16:05 – Inside his AI-powered oral exam system

• 24:33 – "If students can't use AI, why can professors?"

• 39:06 – Preparing students for the job market of 2028

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We get into:

• Why he cut his curriculum down to the "absolute theoretical minimum"

• His AI-based oral exam system that catches understanding gaps missed by multiple-choice tests

• The uncomfortable question I pushed him on: if students can't use AI, why can professors?

• Why he thinks every student needs to start thinking like an engineer

• What "flourishing" means in an AI economy, and why creative destruction isn't just a threat

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Correction

In this video, we referenced "David Susskind, cosmology at MIT"; what we meant was Leonard Susskind, The Theoretical Minimum, Stanford.

Enjoy the episode.