Mark Zandi

October's jobs report was strong, following a weak September. Look past the monthly noise, and the job market is holding firm. Turns out, the reason is surprising: artificial intelligence. Far from the job killer many feared, AI has so far been an engine of job growth.

What do the midterm results mean for economic policy? Not much, at least not right away. Democrats won the House and Senate, but easing the financial strain on many Americans would take legislation, and that requires the President’s signature, which will be hard to come by.

The Fed won’t raise interest rates again when it meets this week, and it shouldn’t. The economy is threatened by a growing list of risks, and a Fed misstep is one of them.

That’s the clear message in our risk matrix, which sizes up each risk by how likely it is to occur over the next 12 to 18 months and how much economic damage it would cause if it did. There’s a lot of red in the matrix, indicating risks that are becoming more likely or more severe.

With all eyes on the inflation statistics released this week, little attention was paid to the Treasury statement released on Friday. It showed the nation racked up a nearly $2 trillion budget deficit in just-ended fiscal year 2026. That’s more than 6% of GDP.

Nearly $2,000. By my calculation, that is what the Iran war has cost the average American household since the war began nearly eight months ago. Nationwide, that adds up to $265 billion.