Why One Economist Calls This the ‘Stupidest Chart in the World’

Robotic arms weld roofs onto automobile frames at a Hyundai factory in Georgia. (Elijah Nouvelage/Bloomberg)

Key Points

• TS Lombard Managing Director Dario Perkins refutes the idea that the S&P 500’s gains are linked to job opening declines.
• Perkins argues that the decrease in job openings reflects successful hiring, not companies replacing workers with AI.
• Alternative indicators from various sources suggest a strong labor market with no sudden rise in unemployment from AI or cyclical reasons.

One popular chart making the rounds compares the S&P 500’s big gain since the launch of ChatGPT to the decline in job openings, with the implication being that Wall Street is benefitting from layoffs on Main Street.

That’s “completely bogus,” writes TS Lombard Managing Director Dario Perkins, who calls it “the stupidest chart in the world.”

There are a few problems with the chart, he argues. The first is that when ChatGPT traffic really started to soar in 2024, the job market was stabilizing. The big declines in openings predate the chatbot’s rise in popularity.

Second, Perkins says, the decline in job openings doesn’t mean that companies were pulling positions in favor of AI, but rather that they succeeded in filling them with real people. In a postpandemic world labor demand surged ahead of supply, but “eventually supply caught up, and companies could swap vacancies for workers,” he writes.

In fact, he notes, that this pattern is visible in data from other developed economies.

To be sure, there are plenty of workers who have lost their jobs to AI, including customer support agents at Salesforce.com and corporate employees at Amazon.com. It is likely that the pattern will continue for other roles.

However that hasn’t been enough to make a dent in the broader labor market, experts say. While most federal economic data isn’t available because of the government shutdown, other sources of information point to continuing strength.

“Alternative indicators from Revelio Labs, ADP, Challenger, MacroEdge, LinkUp, Indeed, Paychex , NFIB, San Francisco Fed and state-level jobless claims show a labor market that is still doing well,” Apollo Global Management chief economist Torsten Sløk wrote on Tuesday. “Most importantly, there are no signs of a sudden rise in unemployment for cyclical reasons or AI reasons.”

Write to Teresa Rivas at teresa.rivas@barrons.com