(1) In your Annual Insights Symposium presentation, you shared that 2025 was the slowest year of job growth outside of a recession in more than two decades. How would you summarize the labor market over the last six months?
I’ll give you one word: better. While job growth did moderate in June after a more robust start to the year, the economy added an average of 92,000 jobs per month in the first half of 2026, a strong acceleration from the average of 10,000 jobs per month seen in 2025.
(2) What do you attribute this change in trend to and how durable do we think it will be?
If you recall back to 2025, there were a couple of significant events in the economy that increased uncertainty. For example, changes in both immigration and trade policies could have had temporary effects on hiring overall for the year.
There was also the larger question about whether a recession was on the horizon in 2025. The overall economy remaining resilient probably helped give some confidence to business that the economy is on strong footing.
(3) What do these trends in hiring mean for workers compensation?
The impacts on workers’ compensation are twofold:
First, the direct impact, which is on the premium equation. In 2025 there was a bit of a unique situation where, even though we didn’t add very much from the employment perspective, wages continued to grow strongly. So overall payroll, a combination of both employment and wages, still grew solidly in 2025. Employment has accelerated in 2026 and wage growth remains elevated; the combination of those two factors is leading to payroll growth that’s starting to accelerate a little bit from where it was last year, which could be positive for the workers compensation industry.
Second, the indirect impact is new hires. New hires typically have higher claim frequency than more tenured workers; so in 2025 when we saw very little employment growth overall, it could have been impacting frequency. With employment picking back up—most notably in industries like construction and manufacturing—we may start to see injury frequency increases due to these short-tenured workers. That’s a potential trend that we’ll monitor this year.
(4) The most recent Quarterly Economics Briefing focuses heavily on AI and the potential impacts on the labor force. What are you seeing there?
There are so many questions about AI and its potential impacts on employment right now and the topline is that it is still too early to draw conclusions. Some economists believe AI will be a great enabler, ushering in a new employment boom. Others advise caution, believing this technology will cause significant job disruption.
(5) Where do you and your team fall on that spectrum?
Somewhere in the middle. When we’re talking about the impact on jobs, we tend to think more about the tasks that make up a particular job instead of the job itself.
Let’s say, for example, that a job has 10 unique tasks and AI can automate one of them. That frees up the worker to spend more time on the other nine tasks, increasing the quality of outcomes, or to add a new task. Both are examples of increased productivity, which can also result in higher wages.
On the other hand, some jobs have a smaller set of tasks or even just one task. These roles may be more vulnerable to disruption from new technologies. But, if we think back through history, there are a number of jobs that used to exist that just don’t exist anymore, like switchboard operators or pin setters at bowling alleys. The labor market continues to evolve alongside technology.
We get into a lot more detail about what this could look like in the Quarterly Economics Briefing so definitely check that out.
