CEA Chair Phelan says the Fed's rate hike 'was a mistake

The U.S. labor market remains resilient despite a softer September jobs report, with current gains of 29,000 to 65,000 jobs per month sufficient to maintain a stable unemployment rate near 4.1%. Christopher Phelan, Chairman of the Council of Economic Advisors, argues that recent volatility in data stems from increased labor force participation rather than economic decline. While artificial intelligence is driving a massive capital expenditure boom—projected to nearly double among top companies by 2026—it has yet to cause significant job displacement; instead, AI-adopting firms are currently hiring at higher rates. This technological shift mirrors historical automation cycles that eventually elevate living standards through productivity gains. Furthermore, recent data showing core PCE inflation at 2% suggests that further Federal Reserve rate hikes are unnecessary, as inflationary pressures were easing even before significant monetary tightening took effect.