A warning shot from a cruise line… A slowdown ahead?… More about jobs and AI… High-profile layoffs… How bad could it get?… College grads are having a hard time… Jensen Huang’s advice…

About the ‘everything else’…

We’ve spilled plenty of ink about AI lately, and we will again momentarily. But today, some sentiment about “everything else” – the real economy – stood out for the first time in a while… and not for a good reason. So I (Corey McLaughlin) will start there…

The benchmark S&P 500 Index was off about 1.2% today, and all the other major U.S. indexes were lower. Consumer-spending-dependent cruise operators were among the biggest losers as a downbeat earnings report from Norwegian Cruise Line (NCLH) dragged down the entire industry.

Norwegian posted record quarterly revenue of $2.94 billion, but that was still short of Wall Street expectations for more than $3 billion. Probably more concerning was the company’s also below-expectation forward guidance, which suggests an anticipated slowdown during the holiday season and the rest of the fourth quarter.

The company’s shares crashed about 15% today – Norwegian’s worst day since April – and hit a four-month low. Its competitors’ shares dropped in sympathy, too, with Carnival (CCL) and Royal Caribbean Cruises (RCL) down roughly 9% and 7%, respectively. Airlines also appeared to drop by association.

We’re talking about just one slice of the economy… But when cruise lines start expecting a slowdown, it’s worth paying attention.

The cruise business gives us insight into Americans’ discretionary spending… and thus their decisions about what they can and can’t afford.

And that’s dependent on what I like to think of as the “space between” (money available) after accounting for costs of living and income or job status. And for multiple reasons, that last point is increasingly tenuous for many people these days.

One of those reasons is (here it is: the word of our time)… AI.

Businesses’ plans to use this emerging technology have led to high-profile layoff announcements – and angst from the public about whether robots are going to take all of our jobs.

Here’s Nick Koziol with more about that…

More on AI’s impact on the job market…

Last week in our Digest feedback, we briefly touched on the changes we’re seeing in the labor market because of AI. Several huge, well-known companies have announced layoff plans – with many of them pointing their fingers at AI.

Here’s a brief list from just the past few weeks…

Online-education company Chegg (CHGG) laid off 45% of its employees (about 390 people) because the “new realities” of AI have led to a “significant decline” in demand for its learning tools. (It had already cut 22% of its workforce in May because of AI.)

Nestlé (NSRGY), the world’s largest publicly traded food company, plans to lay off 16,000 workers over the next two years. That covers 12,000 “white collar professionals” and 4,000 manufacturing and supply-chain roles.

Amazon (AMZN) announced 14,000 job cuts last week, with an increased focus on investing in the company’s “biggest bets” like AI.

And it’s not just these few headline-making companies…

In its monthly survey on U.S. job cuts, consulting firm Challenger, Gray & Christmas reported that more than 17,000 layoffs through the first nine months of the year are directly attributed to AI. That includes 7,000 positions eliminated in September alone, and it doesn’t include Amazon’s October announcement.

All in all, Challenger estimates that AI accounts for at least half of all layoffs where businesses cite any sort of “technological advancements.”

So far, AI’s impact is muted. In the Challenger report, AI-related layoffs were less than 2% of the 946,000 job-cut announcements this year.

But as our colleague Steven Longenecker shared on our Stock Market Trendssite last week, these announcements in the last few weeks only look like the beginning.

It’s about automation…

Nestlé’s manufacturing cuts will come from automating its production…

And Amazon has a goal to hire 600,000 fewer warehouse workers by 2033 (including 160,000 fewer by 2027) – and replace those folks with robots.

AI and the coming release of “humanoid” robots have brought this story back to the forefront. But factory automation has been in place for years. As JPMorgan analysts wrote in an August report on AI’s impact on job growth…

Back in the 1980s, middle-skill occupations that rely on routine tasks – such as sales, manufacturing construction and maintenance – started disappearing due to automation.

But now automation is expanding beyond ‘blue collar’ manufacturing jobs…

More from JPMorgan’s report from this summer…

Today, AI exposes non-routine cognitive occupations – such as scientists, engineers, designers and lawyers – to similar risks.

JPMorgan’s analysts wrote that workers in these sectors have traditionally enjoyed a lower unemployment rate than those in automation-risked sectors and manual jobs.

But these workers are now at a higher risk of unemployment because of AI.

Data from the St. Louis Federal Reserve backs that up. From its own August report on AI and unemployment…

Occupations that embraced generative AI most intensively showed the largest unemployment gains, with a correlation coefficient of 0.57. Again, computer and mathematical occupations, which adopted these technologies most heavily, experienced substantial unemployment increases.

The companies most involved with AI are already warning about this…

In an interview with Axios earlier this year, Anthropic CEO Dario Amodei said that AI could wipe out half of all entry-level white-collar jobs. Specifically, he highlighted the risk to finance, law, and consulting jobs.

That could be a huge factor behind the fact that the unemployment rate for recent college graduates has hit the highest level in more than four years at 9.3%. Put simply, companies are instead filling those roles with AI.

Amodei also suggested that this could cause the unemployment rate to spike to between 10% and 20% within the next five years.

Microsoft (MSFT) also released a 42-page report detailing how folks are using its Copilot AI program and what that could mean for the labor force. Its findings echo the above from the St. Louis Fed…

Occupations for which the potential is small or non-existent include those involving manual labor, operating machinery, or other physical activities. Turning to socioeconomic correlates, we find a very small positive correlation between our AI applicability measure and occupational wage. In terms of education requirements, we find higher AI applicability for occupations requiring a Bachelor’s degree than occupations with lower requirements.

Put another way, Microsoft sees entry-level white-collar jobs as the most at risk, while blue-collar jobs are more secure (likely because automation has already been integrated into those sectors).

More than 2 million college grads enter the workforce with a bachelor’s degree every year. An unemployment rate of 9% for these folks means that about 200,000 of them won’t find work every year.

Those jobs will add up…

In its base case, analysts at Goldman Sachs estimate that AI can already be blamed for about a 0.25% increase in the unemployment rate. But if AI reaches wide adoption, the analysts then estimate that about 7% of the workforce (or 11 million Americans) are at risk of losing their jobs.

And at the high end, they believe that number can hit 14%, displacing 22 million Americans.

But AI can also create new roles – or job descriptions…

As we heard a few times at our annual conference last month, huge technological advances like the Internet will end up creating the next wave of careers and roles. This is something we’ve talked about for years as well. As Microsoft wrote in its report…

This is not a new phenomenon: the majority of employment today is in occupations that arose in the last 100 years as a result of new technologies.

Microsoft cited bank tellers as an example. When ATMs started popping up at bank branches across the country, the number of in-house bank employees actually increased, Microsoft noted. Instead of handling withdrawals and deposits, these folks instead “focused on more valuable relationship-building” with customers.

When it comes to AI, we don’t quite know what those new jobs will look like yet.

But it’s probably wise to think about something Nvidia CEO Jensen Huang said earlier this year: “You’re not going to lose your job to an AI, but you’re going to lose your job to someone who uses AI.”

Another look at jobs…

Tomorrow morning, payroll processor ADP will publish its monthly private-sector report. This is one of the few regular looks at the labor market being published publicly, with the Bureau of Labor Statistics still shut down along with most of the federal government.

Wall Street economists are expecting the report to show a gain of about 22,000 private-sector jobs in October. That would end a streak of two straight months of declining private payrolls and suggest that the labor market isn’t cratering.

And as for what the market could read into it…

If tomorrow’s report looks positive toward the labor market, investors could become less certain that the Federal Reserve will lower interest rates at its next meeting. That would lead to some downward pressure on stocks.

Alternatively, if the ADP report comes in worse than Wall Street expects, it would be evidence that the central bank should continue to cut rates. That could boost sentiment… At least for now, the market wants lower rates more than it wants a strong labor market.

	On this week’s Stansberry Investor Hour, recorded in Las Vegas at our annual conference, Dan Ferris and I welcome Adrian Fenty to the show. Adrian, the former mayor of Washington, D.C., is now a partner with MaC Venture Capital… an early-stage investment firm. We covered everything from how he transitioned from politics to venture capital, to what he looks for in an investment, to how American cities can be improved and why we need to hold politicians more accountable… Click here to watch our entire interview on our YouTube page… or listen to the audio version on our website or wherever you listen to podcasts, like Apple Podcasts or Spotify. Just search “Stansberry Investor Hour” and subscribe to get more episodes when they go live.

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In today’s mailbag, feedback on the problems with “AI obsession,” which we wrote about last week… Do you have a comment or question? As always, e-mail us at feedback@stansberryresearch.com.

“I read Stansberry’s commentary on the AI obsession with interest and the points made are compelling and raised questions about the building blocks for this revolution. I believe there is a key building block for this whole investment thesis beyond who is leading AI, energy required and the leading chip producers. One other critical component is not getting enough attention. To make high-end chips for the AI revolution we need high quality silicon. No silicon, no chips.

“The U.S. imports much of its silicon these days and this is before new chip fab plants are commissioned in the U.S., which will drive demand for silicon. China has grown over the past few decades from being a small producer to become the leading producer of silicon. It seems to me the U.S. needs to focus on this very critical supply chain… this is a rare earths type issue, and producing more silicon in the US is key to the AI revolution.

“We should also align ourselves with Europe and silicon producers there. The U.S. cannot afford to be held hostage like we recently have been with rare earths… the entire investment in AI, data centers and energy will fall apart without the high-quality silicon for the chips to power AI. How will the U.S. make chips without a stable supply of silicon… call up China?

“Controlling the silicon building block may be one of the most important components of this revolution.” – Subscriber Martin E.

All the best,

Corey McLaughlin and Nick Koziol
Baltimore, Maryland
November 4, 2025