Is going to college today worth it?… how entry-level jobs might be a canary in the coalmine… Louis Navellier: You must respond… Luke Lango’s latest research on where Uncle Sam will invest next VIEW IN BROWSER
Youth unemployment just hit 10.4% – doubling the national average and rising briskly It used to be that a bachelor’s degree was a reliable path to a higher salary and more economic opportunity. But today, as Gad Levanon, chief economist at the Burning Glass Institute, just told CNBC, forget the higher salary… For the first time in modern history, a bachelor’s degree is no longer a reliable path to employment. The college-to-career pipeline that defined the American Dream for decades is breaking down… and AI is the wrecking ball. But is this just a preview of a bigger shift that’s going to stretch far beyond entry-level jobs? As we covered in the Digest last week, the latest national unemployment rate climbed to 4.4% in September. That’s not awful, but it’s also not great – it’s the highest level in four years and heading in the wrong direction. But for younger workers between the ages of 16 to 24, the data is more concerning. Their unemployment rate just clocked in at 10.4%. For context, it’s been much higher. The rate approached 20% during the Global Financial Crisis. But the velocity of deterioration matters. As recently as Spring 2023, this rate was just 6.6%. So, topping 10% is troubling and calls into question the collegiate value proposition. Here’s CNBC: An analysis by Goldman Sachs found that the “safety premium” of a college degree is shrinking. Although college graduates are still less likely to be unemployed than their non-degree counterparts, the advantage is smaller than it’s been in decades. To be clear, my question isn't about unemployment – it's about whether the job prospects and salary after graduation warrant the cost – and in most cases, debt. Here’s The New York Post: Less than half of student loan borrowers have been making their payments on $1.6 trillion of debt as they struggle to afford housing and groceries – and some are letting the bills pile up as a form of protest. Only 38% of the 42.7 million borrowers nationwide are in repayment and current following five years of leniency measures from the US government following the COVID-19 pandemic, the Department of Education said in April. | Recommended Link | | | | One company to replace Amazon… another to rival Tesla… and a third to upset Nvidia. These little-known stocks are poised to overtake the three reigning tech darlings in a move that could completely reorder the top dogs of the stock market. Eric Fry gives away names, tickers and full analysis in this first-ever free broadcast. Watch now… |  | | If you’re a regular Digest reader, you’re aware of what’s driving this… AI. Historically, technology has primarily affected blue-collar jobs. Think mechanical power trumping human musculature, or machine consistency outdoing human handiwork. The most dramatic example was in agriculture, where automation reduced the U.S. workforce share from 41% in 1900 to just 2% by 2000. But with AI, we’re seeing a radical shift – it's white-collar jobs that are increasingly on the chopping block. From Pew Research: Jobs with a high level of exposure to AI tend to be in higher-paying fields where a college education and analytical skills can be a plus… Workers with a bachelor’s degree or more (27%) are more than twice as likely as those with a high school diploma only (12%) to see the most exposure. But now, look wider – is rising youth unemployment a canary in the coalmine? We’re not yet at the tipping point of AI’s economic creative destruction, but it’s coming. For now, job losses are being offset by new jobs in areas like healthcare, construction, hospitality, and transportation, which aren't as vulnerable to AI. Plus, many laid-off workers are finding new roles, often in companies adopting AI but needing people to manage, prompt, or train the systems. In other words, for the time being, AI is being used to augment rather than replace workers. But let’s be clear – this is a temporary transition stage. In prior Digests, I’ve made an analogy to Ernest Hemingway’s novel “The Sun Also Rises.” When asked how he went bankrupt, a character replies, “Two ways. Gradually, then suddenly.” How deep into “gradually” are we today? Legendary investor Louis Navellier has been researching this transition from a cultural, economic, and investment perspective It was through Louis and his team that I was introduced to the term “double exponential.” Originally used (in the context of technology) by futurist Ray Kurzweil, author of “The Singularity is Near,” the term describes the idea that technological progress doesn't just follow a single exponential trend but often accelerates at an even faster rate. “Double exponential” growth means that not only is the growth rate increasing, but the rate at which it increases is accelerating. Here’s Louis tying this idea to our economy and labor market: Today, we find ourselves at a moment I call the “Economic Singularity.” This is the moment when AI crosses a threshold and makes most human labor economically irrelevant. We’re past the point of no return. AI is improving itself now. It’s creating its own agents. And writing its own code. What comes next? In short, the biggest transformation of wealth and labor in human history… Folks, I know this sounds dramatic, but I’m telling you straight. It’s the way innovation works. It happens slowly at first… and then, all of a sudden, everything is different. Last month, Amazon announced it was laying off 14,000 workers – the largest cut in its history Why? Here’s Amazon human resources chief Beth Galetti, explaining – and echoing Louis’ broad points: This generation of AI is the most transformative technology we’ve seen since the Internet, and it’s enabling companies to innovate much faster than ever before. We’re convinced that we need to be organized more leanly, with fewer layers and more ownership, to move as quickly as possible for our customers and business. Stepping back, the only difference between a 22-year-old college grad who can’t find work and the 52-year-old working professional is that AI hasn’t scaled to take that 52-year-old worker’s job… yet. But our current trajectory suggests that the switch is on the way… Now, Louis makes an important point: You don’t have to like this change – but you must choose how you’ll respond to it. And part of that involves aligning your wealth with the very technology that might be disrupting your employment. To this end, Louis recently released a new batch of research. It includes four special reports covering: 1) the top stocks for this age of the Singularity, 2) which physical AI (think “humanoids/robots”) to buy today, 3) a “Complete Portfolio Protection” Plan, and 4) how to find pre-IPO, potential Unicorn AI investments before they’ve gone public. You can learn more about accessing all this by clicking here. Pulling back, here’s our paradox… On one hand, AI is eliminating jobs "gradually, then suddenly" – starting with the youngest/least experienced workers but accelerating up the age/experience ladder. But the gains in select stocks benefiting from this shift to AI are anything but “gradual.” Many are already exploding – and those who get positioned early stand to benefit most. Which brings us to an unlikely AI investor who has been crushing the market in recent months… “Uncle Sam is outperforming the S&P 500” That’s not hyperbole – it’s a headline from CNN last week. In recent months, the federal government has increasingly been acting like a strategic investor, not merely a regulator or subsidy dispenser. It has taken direct equity stakes in Intel (INTC), MP Materials (MP), Lithium Americas (LAC), and Trilogy Metals (TMQ). Behind each of these moves is a common denominator – AI. The U.S. government sees advanced semiconductors, rare-earths, battery materials, and AI-enabling infrastructure as the front line of global competition in the AI race. Securing domestic production – and reducing reliance on China – has become a national-security priority. Now, whether you’re for or against these government investment stakes, one thing is true… If you’d invested alongside the government, you’d be up big today. Here’s CNN: So far, the government’s portfolio is outperforming the S&P 500. Intel shares are up 77% this year. MP Materials shares have soared 276%. Lithium Americas and Trilogy Metals shares are up 50% and 204%, respectively. The benchmark S&P 500 is up 14.5% this year. Given these results, investors naturally want to get ahead of where Washington may point its firehose of capital next. So, which companies are the most likely targets? That’s where our technology expert Luke Lango comes in. Prepare for America’s “Manhattan Project for AI” If you’re new to the Digest, Luke is the editor of Early Stage Investor, our premium service focused on pre-IPO and early-stage AI opportunities. And in recent weeks, he’s been researching what he calls America's "Manhattan Project for AI" – a multi-trillion-dollar effort to secure U.S. dominance in artificial intelligence. As part of this initiative, Washington appears to be lining up a new wave of small, overlooked U.S. AI companies that could receive strategic support. But the key to benefiting from such moves is to be there early, not following the masses. Here’s Luke with more: Most investors will hear about these deals after they happen. That’s too late. By the time the average person sees the headline… the juicy part of the move has already happened. That’s why I’ve spent the past several months building a list — not of companies that already received government backing — but to tell you about the companies most likely to be next. Luke has identified seven under-the-radar AI companies he believes are next in line – firms with the potential to soar 5X – even 10X – as federal investment accelerates. And in his new research briefing, he reveals the name of the first one for free. Wrapping up We opened by spotlighting a troubling trend: rising youth unemployment and the weakening college-to-career pipeline. But as I’ve tried to show in today’s Digest, this isn’t just a generational hiccup – it’s part of a broader economic realignment driven by AI. Whether with Louis and the Singularity or Luke and the Manhattan Project for AI, let’s get prepared. Have a good evening, Jeff Remsburg | 
