With the holiday season well underway, the following video from 2024 showing how a number of teens engaged in productive activities to help shoppers with gift wrapping services seems a good way to start our analysis of the teen employment situation.

Now, to the main story! The U.S. Bureau of Labor Statistics is slowly releasing the employment situation data that went unreported during the government shutdown fiasco. The data it reported for September 2025, which would have been reported at the beginning of October 2025 if not for a minority of Senators who obstructed a bill to fund the U.S. government's operations, shows that teen employment rebounded strongly in September 2025.

More remarkably, it was mostly led by younger teens, Age 16 and 17, whose seasonally adjusted numbers jumped from their August 2025 low. Older teens also had gains, which were solid, but paled in comparison to the numbers for younger teens.

The following chart captures the unexpected surge:

Unfortunately, there is a cloud on the horizon for teen employment. AI technology would appear set to decimate traditional teen employment opportunities in the years ahead:

For American teens, the summer job isn’t what it used to be. By 2030, it may barely exist at all. That’s the urgent finding from high school senior Karissa Tang, who spent the last 18 months researching how artificial intelligence is poised to reshape youth employment across the U.S.

Her work, conducted under the mentorship of UCLA Anderson’s Professor Geis, breaks the debate down to actual numbers that should alarm policymakers and parents alike. According to her analysis, AI will displace over 770,000 teen jobs by the end of the decade, gutting 27% of the most common positions teens hold today....

Tang’s paper, “The Impact of AI on American Teenage Employment by 2030”, tracks ten job categories that make up just over half of all teen employment. Her method connects market forecasts for specific automation and AI-powered tools, such as self-checkout systems or restaurant kiosks, to how many people each system replaces.

Tang identifies cashier jobs as especially vulnerable, with AI-programmed kiosks enabling a 54% decline.

But Tang sees where teens may have advantages over older members of the work force:

While it might be easy to assume AI hits all workers equally, Tang argues that’s a mistake. Teens often perform narrower tasks, have less experience, and earn lower wages, she explains. That makes them especially replaceable, or, in some cases, worth keeping precisely because they cost less.

“The ‘teen advantage’ is that they cost less,” Tang notes. “So for companies who are looking at AI to help cut costs, they may choose to lay off a higher proportion of older workers.”

It could be that younger teens may see disproportionate gains in the job market of the future.

China's economy is being slammed by the global tariff war.

Here is a sampling of recent headlines from the last month indicating China's economy is facing strong headwinds:

• China factory activity stumbles as export orders dry up
• China's exports suffer worst downturn since February
• Weak Data Raises Concerns for China's Economy
• China steel output slumps as iron ore imports head for record
• China manufacturing is slumping despite boost from US trade truce
• China's services growth slips to five-month low in November
• China's Trade Surplus Hits Record $1tn Despite Trump's Tariff
• Beijing Data Blackout Raising Alarm Bells About China's Economy

If you just went by these headlines, you might think that China's economy is merely slowing. Worse, you might think China's government is able to fully hide how its economy is performaing. But it's not just these reports that reveal the state of China's economy.

Because China is, by a very wide margin, the world's biggest producer of carbon dioxide emissions, the rate at which CO₂ accumulates in the Earth's atmosphere provides direct evidence of the relative health of the nation's economy. Data collected at the remote Mauna Loa Observatory indicates the trailing twelve month average rate at which carbon dioxide accumulates in the Earth's atmosphere is rapidly falling, from which we can infer economic growth is having trouble getting traction within the country.

The following chart shows how this measure has evolved from January 2000 through November 2025:

Atmospheric carbon dioxide concentration data lags behind changes in CO₂ output, taking several weeks to diffuse into the Earth's air after being emitted. The peak in January 2025 coincides with Chinese emissions peaking in December 2024, which itself coincides with efforts by China's exporters to crank up production to beat the clock on new U.S. trade tariffs going into effect in 2025. January 2025 saw the Biden administration final tariff increases go into effect, while President Trump's new tariffs were put into effect in April 2025. Not uncoincidentally, there's a short spike upward in May 2025 that would correspond with a surge by producers in China to beat the clock on April 2025's tariffs.

Since the atmosphere's pace of CO₂ accumulation peaked at 3.57 ppm in January 2025, it has fallen by 0.71 ppm to 2.87 ppm through November 2025. With an estimated world population of 8.005 billion people, that drop represents roughly a reduction of 5.5 billion metric tonnes of carbon dioxide emissions. It also represents an estimated $23.6 trillion decline in the world's GDP during the last ten months.

China's reduced output of carbon dioxide emissions, primarily stemming from its involuntarily reduced industrial output, represents a large share of that overall decline. If not for the impact of the global tariff war, which still threatens to hit China's industrial economy with even more tariffs, it is highly unlikely a decline of this magnitude would have occurred in the absence of a major global recession.

References

National Oceanographic and Atmospheric Administration. Earth System Research Laboratory. Mauna Loa Observatory CO2 Data. [Online Data]. Updated 5 December 2025.

Image credit: Plant with two smokestacks with one emitting flue gases on PxHere.com. Creative Commons Creative Commons - CC0 Public Domain.

The probability that the National Bureau of Economic Research will someday determine a national recession began in the U.S. between December 2025 and December 2026 has fallen below twenty percent.

That is the lowest probability returned by a recession forecasting method that we've been following since December 2022, which we started tracking after the U.S. Treasury yield curve inverted in October 2022. This method was developed by Jonathan Wright while working for the Federal Reserve Board back in 2006. It incorporates the one-quarter averages of the spread between the 10-Year and 3-Month constant maturity U.S. Treasuries and the level of the Federal Funds Rate to anticipate, within a 12-month period from an observation date, what the probability the U.S. economy will be in a period of contraction according to criteria used by the NBER.

The reason we're following it is because it often takes the NBER months to get around to making that determination after a recession has started. And since a yield curve inversion, when the yield of a 3-Month Treasury is higher than the yield of 10-Year Treasury, is often a harbinger of recession, using a recession forecasting method built using historic data that incorporates it can be useful.

The current recession probability level has been achieved following the two reductions in the Federal Funds Rate the Fed has made in the last three months. These cuts have lowered this base interest rate to a target range of 3.75-4.00%. Investors expect the Fed will act again on Wednesday, 10 December 2025 to lower it by another quarter percent to a target range of 3.50-3.75%, the lowest it has been since October 2022.

The following update to the Recession Probability Track shows how the probability of recession has evolved from 20 January 2021 through 8 December 2025 in the context of how the difference between the yields of the 10-year and 3-month U.S. Treasuries combined with the level of the Federal Funds Rate have changed over this time.

Because Wright's method looks to see whether any of the next twelve months into the future will contain a month the NBER will determine marks the peak of a business cycle, or rather Month 0 of a period of economic contraction, having the latest recession probability falling below the 20% threshold doesn't mean the U.S. economy is out of the woods. We've summarized what periods Wright's method has indicated since we've been tracking it for this series is most likely to include that Month 0:

50% Probability of Recession

• 13 February 2023 through 29 November 2025

60% Probability of Recession

• 25 April 2023 through 29 October 2025

70% Probability of Recession

• 25 May 2023 through 8 October 2024
• 31 January 2024 through 29 March 2025
• 5 September 2024 through 20 September 2025

These are the periods the recession forecasting method predicts the National Bureau of Economic Research will someday identify as containing the month in which a period of economic contraction began. The three sets of dates that apply for a 70% or greater probability of recession relate to a "triple-top" series of peaks the model has recorded since mid-2023.

The end of the first period at this greatly elevated recession probability coincides with when the U.S. Federal Reserve initiated a new series of interest rate cuts that took place between September and December 2024 to forestall a recession from starting in the U.S. during the 2024 election season.

The first two periods coincide with a period of anemic job growth in the U.S. economy, which is confirmed by Bureau of Labor Statistics data that has undergone two massive downward revisions, confirming the labor market was far weaker than initially reported.

The third period coincides with the timing for when the Federal Reserve resumed cutting U.S. interest rates to address a slowing economy in September 2025.

The most important thing to take away from this retrospective analysis is that the recession model's forecasts for these elevated recession probabilities were set more than a year ago. Today's economic weakness has been baked in for a very long time.

Analyst's Notes

This is the end of the road for our series! Both our criteria for terminating the series have now been met: the U.S. Treasury yield curve has not been inverted since September 2025 and the recession probability threshold finally dropped below 20% this month. If you still want to follow recession probability estimates, there are alternate estimates based on different methods that will give you a current estimate.

The recession probability we've presented is based on the Federal Reserve Board's yield curve-based recession forecasting model, which factors in the one-quarter average spread between the 10-year and 3-month constant maturity U.S. Treasuries and the corresponding one-quarter average level of the Federal Funds Rate. If you'd like to do that math using the latest data available to anticipate where the Recession Probability Track is heading, we have provided a tool to make it easy to do.

Previously on Political Calculations

We started this new recession watch series on 18 October 2022, coinciding with the inversion of the 10-Year and 3-Month constant maturity U.S. Treasuries. Here are all the posts-to-date on that topic in reverse chronological order, including this one....

• U.S. Recession Probability Drops Below 20%
• U.S. Recession Probability Falls After Fed Resumes Rate Cuts, Set to Fall Further
• U.S. Recession Probability as Fed Finally Set to Resume Rate Cuts
• U.S. Recession Odds Holding Mostly Steady with Fed Holding Off on Rate Cuts
• U.S. GDP Contracts as Recession Odds Tick Up with Fed on Hold
• Decline in U.S. Recession Odds Stalls with Pause in Fed Rate Cuts
• U.S. Recession Probability Plunges to 27%
• U.S. Recession Probability Drops Below 50%
• U.S. Recession Odds Fall with Fed Rate Cut, But Are Still Elevated
• Triple Top Pattern Locking In for U.S. Recession Probability
• Triple Top Developing for U.S. Recession Probability
• U.S. Probability of Recession in Next Twelve Months Hovers Near 70%
• Recession Probability Falls After Hitting Double-Top
• U.S. Recession Probability Nears a Double-Top
• Probability of U.S. Recession Resurges to Nearly 75%
• U.S. Recession Odds Recede to Two Out of Three Chance in 2024
• U.S. Recession Probability Continues Receding on All Hallow's Eve
• U.S. Recession Probability Starts to Recede
• Probability of Recession Starting in Next 12 Months Breaches 80%
• U.S. Recession Probability on Track to Rise Past 80%
• U.S. Recession Probability Reaches 67%
• U.S. Recession Probability Shoots Over 50% on Way to 60%
• Recession Probability Nearing 50%
• Recession Probability Ratchets Up to Better Than 1-in-6
• U.S. Recession Odds Rise Above 1-in-10
• The Return of the Recession Probability Track

Image Credit: Microsoft Copilot Designer. Prompt: "An editorial cartoon of a Federal Reserve official looking into a crystal ball that says 'RECESSION? ASK AGAIN LATER'".

The S&P 500 (Index: SPX) closed out the first week of December 2025 at 6,870.40, up 0.3% from where it closed the previous week.

The main focus of investors continues to be what action the Federal Reserve will take with short term U.S. interest rates. After putting on a show in recent weeks to try to convince markets that it might not continue reducing the Federal Funds Rate at the end of its next rate-setting meeting on Wednesday, 10 December 2025, evidence of continued anemic growth in the U.S. labor market announced during the past week is leading investors to expect the Fed will cut rates.

The CME Group's FedWatch Tool captures that sentiment. It held steady in the past week, indicating an 87% probability of a quarter point rate cut on 10 December (2025-Q4). Looking beyond the end of 2025, the FedWatch tool gives better than even odds for additional quarter point rate cuts on 29 April (2026-Q2) and 29 July (2026-Q3). A third rate cut anticipated for 9 December (2026-Q4) a week ago is no longer in the outlook, with the next potential rate cut pushed out into 2027.

Even though the probability of a rate cut is high, the Fed's minions arguing against a rate cut have succeeded in creating enough doubt that investors remain focused on the current quarter of 2025-Q4 in setting current day stock prices. The latest update of the alternative futures chart shows the trajectory of the S&P 500 falls in the middle of the redzone forecast range we added two weeks earlier, assuming investors would be focused on 2025-Q4 going into this upcoming trading week.

After the Fed meets, there will be little reason for investors to continue placing much attention on 2025-Q4. We think investors will quickly shift their forward-looking attention toward the slightly more distant quarter of 2026-Q1, since it will become the focus of timing for the next rate change actions by the Fed.

Whether that plays out as we think will depend on the random onset of new information. Speaking of which, here are the market-moving headlines that influenced investor expectations during the past week.

Monday, 1 December 2025

• Signs and portents for the U.S. economy:
• Oil climbs over $1 a barrel on OPEC action, Ukraine attack
• OPEC+ holds oil output steady, agrees capacity mechanism
• US manufacturing stuck in doldrums as tariff headwinds persist
• Fed minions disagreeing with each other could hurt markets, expected to deliver rate cut in December:
• Flurry of Fed dissents in coming meetings could pose market, political risks
• BofA expects December Fed cut, two more in 2026
• Bigger trouble, mixed growth signs developing in China:
• China's central bank vows crackdown on virtual currency, flags stablecoin concerns
• China's November new home prices climb but resale values extend declines, survey shows
• BOJ minions getting excited to hike Japan's interest rates:
• BOJ to consider rate hike in December, governor says; yen, yields rise
• Global bonds slide after hawkish Bank of Japan comments
• Yen rises and bonds fall after BOJ governor hints at rate increase
• Bigger trouble developing in Eurozone:
• China export controls push European firms to move supply chains
• U.S. stocks end lower as yields rise at the start of December
• Wall Street ends lower as yields climb; crypto stocks drop

Tuesday, 2 December 2025

• Signs and portents for the U.S. economy:
• Oil eases amid uncertainty around Russia-Ukraine peace plan, oversupply worries
• OPEC+ members to undergo annual oil capacity audit under new plan, sources say
• Q3 earnings show firm revenue gains alongside softer low-income demand
• Chief Fed minion might linger after being ousted as Chief in 2026:
• Trump says he will announce Fed chief nominee in early 2026
• Powell could stay on as Fed governor after giving up chair role, like former chief Eccles
• Major brokerages boost bets on December Fed rate cut ahead of policy meeting
• Bigger trouble developing in China:
• China manufacturing is slumping despite boost from US trade truce
• China floods the world with gasoline cars it can't sell at home
• Chinese censors crackdown on online 'doom-mongering' of property sector
• BOJ minions rate hike plans to have global impact:
• Japan's economic normalisation will affect global liquidity
• Demand for Japanese bonds reassures jittery markets
• ECB minions say they have Eurozone inflation right where they want it:
• Euro zone inflation ticks up, pointing to steady ECB rates
• Euro zone inflation practically at target, ECB's Nagel says
• Wall Street rebounds, ends higher as Bitcoin, tech stocks rise
• Equities rise on Fed rate cut optimism, Boeing jumps

Wednesday, 3 December 2025

• Signs and portents for the U.S. economy:
• The AI frenzy is driving a new global supply chain crisis
• Exclusive: More US soybean shipments to China due to load through mid-December
• Oil rises as Moscow peace talks fail to reach breakthrough
• Fed minions stop losing money after three years:
• Fed data suggests central bank has stopped losing money
• Bigger trouble, stimulus developing in China:
• China's services growth slips to five-month low in November
• China likely to chase 5% GDP growth in 2026 in bid to end deflation
• Major Chinese banks cut high-yield deposit products to ease margin pressure
• Business recovery developing in Eurozone, ECB minions worry about 'upside suprises':
• Euro zone business activity expands at fastest pace in 30 months in November
• ECB's Lane flags 'upside surprises' to euro zone inflation
• U.S. stocks shrug off selloff to end higher after lower-than-expected jobs data
• Indexes close higher as data keeps Fed rate cut expectations elevated

Thursday, 4 December 2025

• Signs and portents for the U.S. economy:
• Lower interest rates would likely eliminate the need for 50-year mortgage, US Treasury adviser says
• US private payrolls post largest drop in more than 2-1/2 years in November
• US weekly jobless claims dive to a more than three-year low
• Oil rises on expectations of Fed rate cut, Ukraine peace talks stalling
• Americans head to dollar stores as affordability crunch pinches consumers
• Fed minions see steady unemployment rate, still expected to cut rates in December 2025:
• Chicago Fed sees November unemployment rate steady at 4.4% as alternate data shows job losses
• Economists double down on December Fed cut despite policymaker divide
• Bigger trouble, stimulus developing in China:
• China's Real Estate Collapse Sends Local Debt To Record $18.9 Trillion
• Exclusive: China state-owned banks soak up dollars to slow yuan gains, sources say
• BOJ minions think they've won something:
• BOJ likely to raise rates in December, government to tolerate move, sources say
• BOJ wins first showdown with Takaichi - what's next is less certain
• BOJ's Ueda flags uncertainty on how far rates can go up
• Japanese 10-year bond yields rise to highest level since 2007
• Weak Japanese yen is ticking time bomb
• Explainer. How will a rise in Japanese interest rates affect global markets?
• Wall Street ends mixed after struggling to stay afloat on lower-than-expected job cuts, Metaverse news
• Investors cheer Meta's reported Metaverse cuts, a segment that has bled $73B in losses
• EU hits Meta with antitrust probe over plans to block AI rivals from WhatsApp
• Indexes end near flat, supported by Fed hopes but dragged by Amazon

Friday, 5 December 2025

• Signs and portents for the U.S. economy:
• Oil prices hold steady due to stalled Ukraine peace talks and supply outlook
• More investment bankers expect Fed minions to deliver rate cut:
• Jumped the gun, says Morgan Stanley; reverses Dec Fed rate call to 25bps cut
• Recovery signs developing in China:
• China's November exports expected to have rebounded off US tariff truce
• JapanGov minion makes show of BOJ minions having independence from JapanGov minions as bigger trouble develops in Japan:
• Japan's economy minister says up to BOJ to decide 'specific monetary policy means'
• BOJ expected to choose 'constructive ambiguity' on future rate hikes
• Japan October household spending falls at fastest pace in nearly 2 years
• Wall St closes with slight gains as data keeps Fed cut expectations on track
• U.S. stocks end higher as NFLX-WBD acquisition fuels sentiment, investors assess inflation gauge

We're rapidly coming up on another period in which we'll need to add another redzone forecast range to the chart to track the most likely trajectory the S&P 500 will be taking in the weeks ahead. Unlike the current redzone forecast range that is set to end early in this upcoming week, we anticipate the actual trajectory of the S&P 500 will overshoot the projections of the dividend futures-based model for several weeks going into 2026. This is a consequence of the model's use of historic stock prices as the base reference points for making its projections of the S&P 500's future, in which the echoes of past volatility affect the model's forecasts. The redzone forecasts we add get around that inconvenience by bridging across the period in which those echoes affect the model's raw projections.

The Atlanta Fed's GDPNow tool projection of real GDP growth in the U.S. during the recently ended 2025-Q3 ticked down from +3.9% last week to +3.5% week. The tool won't shift to forecast 2025-Q4's GDP until 23 December 2025. The BEA's official initial estimate of GDP for 2025-Q3 will be released on that date.

Image credit: Microsoft Copilot Designer. Prompt: "An editorial cartoon of a Wall Street bull and a bear watching a stage show featuring a Federal Reserve official who is announcing a rate cut"

According to Revelio Labs' public labor statistics data, seasonally adjusted total nonfarm employment in the U.S. fell by in November 2025. The firm's estimate of nonfarm employment is 159,231,610 for the month, down about 9,000 from its revised estimate of 159,240,592 for October 2025. Compared to November 2024 however, the estimate for November 2025 is up nearly 208,000.

Revelio Labs' data indicates total nonfarm employment peaked in April 2025 at 159,280,995 and has largely been slightly lower to flat in the period since. November 2025's estimate is within 0.03% of that peak.

Meanwhile, the BLS has released employment data through September 2025, putting its initial estimate of seasonally adjusted total nonfarm employment at 159,626,000 for the month, which represents a peak in its data series. This value is up 119,000 from the BLS' revised estimate of 159,507,000 for August 2025 and is almost 370,000 higher than Revelio Labs' estimate for September 2025.

Before we go any further, Revelio Labs' appears to have executed a major revision of its historical data, with large negative changes to its oldest data that tapers off to very small downward changes for the most recent months. The following chart captures both the BLS' and Revelio Lab's latest estimates of seasonally adjusted total nonfarm employment over the period from January 2022 through November 2025 and all Revelio Labs' estimates released in October, November, and December 2025.

Analyst's Notes

At this writing, Revelio Labs' has not produced any statement to account for its large downward revisions in its oldest data, which are substantial. In our featured chart, the firm's November 2025 estimate for January 2022 was reduced by over 1.6 million from its October 2025 estimate. Even so, the firm's estimate for January 2022 is over 1.9 million higher than the BLS' estimate for the month.

Without an explanation, we caution against using Revelio Labs' historical data in other analyses. We do observe that Revelio Labs' data does generally match the direction of employment changes in the BLS' historical series over the period covered in our chart, so its still likely useful for divining that aspect of how the total nonfarm employment level is changing over time.

The Bureau of Labor Statistics indicates it will next release its employment situation data on Tuesday, 16 December 2025, which will include newly released estimates for both October and November 2025.

References

Revelio Labs. Total Nonfarm Employment National. [CSV Data]. 4 December 2025.

U.S. Bureau of Labor Statistics. Total Nonfarm Employment. Current Employment Statistics - CES. [Online database]. Last Updated 20 November 2025.

Image credit: Big Data by Learntek on Flickr. Creative Commons CC0 1.0 Universal Deed. Public Domain.