Squawk Pod Gary Cohn on the Shutdown & AI’s Impact on the Labor Market 10/29/25
Oct 29, 2025
Gary Cohn, former Director of the National Economic Council and current IBM vice chairman, dives into the economic strain from the ongoing government shutdown and discusses how AI is reshaping the labor market. He highlights the contrast between robust stock markets and challenges for furloughed workers. CNBC's Robert Frank reports on billionaire spending in the NYC mayoral race, revealing the influence of wealthy donors on political campaigns. Together, they examine the implications of high taxes and the evolving role of AI in the economy.
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Earnings Strong, Layoffs Rising
- Corporate earnings remain strong but recent earnings seasons show unusually large layoffs across many firms.
- Gary Cohn links this to rising input costs, stagnant consumer prices, and companies squeezing labor to protect margins.
Shutdowns Create Short-Term Spending Bounce
- Gary Cohn describes government workers tightening spending during shutdowns and then spending back pay later.
- He says that delayed pay acts like a short-term stimulant when funds are returned to the economy.
Input Costs Squeeze Labor
- Firms face higher input costs while consumer prices don't rise enough to pass them on.
- Gary Cohn says companies respond by cutting labor to make quarterly numbers work.