Macro Musings with David Beckworth Martha Gimbel on the Impact of AI and the Trade War on Labor Markets
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Dec 15, 2025 
Martha Gimbel, executive director and co-founder of the Budget Lab at Yale, shares her insights on the impact of AI and trade wars on labor markets. She discusses the troubling gap in BLS data and its implications for economic analysis. Gimbel highlights the slow adaptation to AI in workplaces and the uncertainties about which jobs are most at risk. She argues for the continued importance of foreign language learning despite AI advancements. Additionally, she breaks down the economic effects of tariffs and the demand for US treasuries in a shifting global landscape.
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Long Horizons Reveal Hidden Policy Costs
- The Budget Lab analyzes policy with longer 30-year horizons to reveal effects that short windows hide.
- Some policies boost short-run growth but worsen long-run GDP due to debt and delayed fiscal drag.
Private Data Is Helpful But Incomplete
- Private-sector high-frequency data help but cannot replace comprehensive public statistics like BLS and CPI.
- Relying on company data risks selection bias and misses economy-wide coverage and price detail.
Invest In Better Public Statistics
- Fund statistical agencies with more resources and larger samples to measure modern labor changes.
- Use new methods and surveys to track technology diffusion and questions we will need to answer going forward.