Marketplace Morning Report The messy, tricky, hairy task of economic forecasting
Jan 28, 2026
Susan Schmidt, portfolio manager at Exchange Capital Resources, weighs in on jobs and market reactions to tech and AI. Chris Farrell, senior economics contributor, unpacks why forecasts often miss recessions and how data-driven ranges still aid planning. They debate Fed signals, investor optimism about AI, and using forecasts for bets and hedges.
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Layoff Headlines Can Mislead
- Big corporate layoffs grab headlines but most U.S. employment is at smaller firms.
- The Fed focuses on overall unemployment rates to judge interest rate effects, not just headline cuts.
AI Hype Raises Productivity Questions
- Investors currently view AI-driven productivity gains as a positive for markets.
- High valuations reflect uncertainty about how much productivity AI will actually deliver.
Forecasts Reveal Useful Ranges
- Forecasts are often wrong because data is messy, revised, and future shocks are unpredictable.
- Despite limits, forecasts offer useful ranges that help planners hedge and prepare for multiple outcomes.