On Friday, the 162,000 new positions created in August1 indicated that AI had not in fact taken all of our jobs, and somehow we had created many more than expected. But before the digital ink had dried on that story, we were instructed to point our data anxiety toward this week’s release of August inflation numbers.
That is the rhythm of the news flow. Be afraid > good news > good news may be bad news for rates > just wait until you see what gas prices do to the inflation numbers, etc.
For advisors and investors, it is worth stepping back from the signal overload and considering a longer pattern with technology and employment in the US.
For much of the 20th century, “American-made” was a global badge of honor. American cars, tools, industrial machinery, and technology represented quality, capability, and leadership. In 1880’s the US overtook the UK as the leading producer of manufactured goods.1 Our employment in manufacturing peaked almost 100 years later in 1979.2
Then cheaper labor and more centralized industrial policy gave foreign competitors the advantage. American manufacturers faced a hard choice: move production or risk being competed out of business.
After China was admitted to the WTO in 2001, US manufacturing fell off a cliff in the following 6 years shedding about 1 Million manufacturing jobs and more than double that in total related fields.3
We may be watching a version of that story unfold in AI.
The United States leads at the frontier, investing about 2% of GDP in AI.4 The most advanced models, chips, and computing infrastructure are still largely American. For highly sensitive applications, from national security to critical business systems, the higher cost is justified. Reliability, security, and control is more important than shaving a few bucks.
But most AI use will not be at the frontier.
For many everyday tasks, an AI model that is a few months behind the very best model may be more than sufficient. Most of us are not curing cancer, creating autonomous robots, or creating data centers in space.
While the US maintains AI supremacy now, this story has just begun. The current winners will face more and more competition as global forces catch up and the market broadens.
For investors, the challenge is avoiding the temptation to treat AI as one trade with one obvious outcome.
AI has and will create extraordinary winners. It may also create fierce competition, narrower margins, faster disruption, and sharp disappointments for companies that are counting on sustained exponential growth. We should not expect the current winners to be the ones standing as we go through the normal cycle of a hyped up new technology.
A durable portfolio should be built to participate in innovation without requiring one version of the AI story to be exactly right.
- https://www.bls.gov/news.release/empsit.nr0.htm
- https://www.cfr.org/education/learn/reading/how-did-united-states-become-global-power
- https://www.bls.gov/opub/btn/volume-9/pdf/forty-years-of-falling-manufacturing-employment.pdf?utm
- https://www.aeaweb.org/articles?id=10.1257%2Faer.103.6.2121&utm
- https://www.axios.com/2026/08/12/ai-boom-goldman-sachs
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