March 2 | Need to Know Briefing

Written by Hilary Sargent | Mar 3, 2026 12:13:25 AM

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LABOR MARKET NEWS & TRENDS | TALENT, RECRUITING, & RETENTION | TECHNOLOGY & INNOVATION

Labor market news & trends

Conference Board's Lading Economic Index declined in December:

The Conference Board's Leading Economic Index (LEI) continued its decline in December. The index was down 0.2% for the month, to 97.6.

December's decline comes after a 0.3% decline in November and a 0.2% decline in October.
In the second half of 2025, the index declined 1.2%, a "substantial improvement from its 2.8% contraction over the first half of 2025."
The LEI is a composite index that takes into account ten different components, including average weekly hours in manufacturing, average weekly unemployment claims, manufacturing orders, building permits for housing units, stock prices, and consumer expectations.
While December saw an increase in select components, "persistently weak consumer expectations indicators", declining manufacturing new orders, an increase in unemployment claims and a decline in average weekly hours in manufacturing all contributed to the LEI's overall decline.
The latest LEI "signals weaker economic activity at the start of this year."
The Conference Board is projecting a "slowdown in growth in Q4 2025 and early 2026, with GDP set to expand by 2.1% YOY in 2026, from a forecasted 2.2% in 2025."

Read more via The Conference Board

U.S. economic growth slowed in Q4 2025:

The U.S. economy grew at just 1.4% in the last three months of 2025. That's well below the 2.5% growth rate economists expected.

2025 growth was the weakest since 2022: The 1.4% growth rate in the fourth quarter was a massive drop from the summer's strong 4.4% pace. For all of 2025, the economy grew 2.2%, slower than 2024's 2.4% and the weakest showing since 2022.
Government shutdown had an impact: According to the Commerce Department, the government shutdown from October 1 through November 12 cut roughly 1 percentage point from GDP growth in the quarter, though they added the "full effect...cannot be quantified."
Consumers are pulling back on spending: Many Americans are anxious about jobs and money after years of high inflation. Consumer confidence hit the lowest level in over a decade in January, with more people saying jobs were "hard to get."
Job market remains shaky: Hiring stalled in 2025 as businesses dealt with confusion over tariffs and immigration policies, plus uncertainty about whether AI means they'll need fewer workers. January showed some improvement, but almost all the new jobs were in healthcare.

Read more via The Wall Street Journal

Trump increases tariff on all imported goods to 15% after Supreme Court blocks his original plan:

President Trump announced Saturday he's raising his new worldwide tariff to 15%, just one day after he set it at 10% following a Supreme Court decision that struck down his previous tariff methods.

The new tariff takes effect immediately: Trump posted on Truth Social that he was increasing the rate right away, saying he was "raising the 10% Worldwide Tariff on Countries, many of which have been 'ripping' the U.S. off for decades."
Trump is using a new legal approach: After the Supreme Court blocked his usual way of adding tariffs on Friday, Trump is now using Section 122, “which no president has ever used.” This new approach lets him charge tariffs for 150 days unless Congress agrees to extend them.
Foreign countries expect tariffs to continue: Even with the legal problems, leaders and business owners in other countries believe U.S. tariffs will stay in place in some way as long as Trump is president.
It remains unclear what happens next: Experts don't know yet how these tariff changes will affect world trade, prices, jobs, and economic growth, though most economists think Trump's overall approach to trade won't change much.

Read more via The New York Times

Trump announces plans to offer new retirement plan to Americans without employer 401(k) option:

At last week's State of the Union address, President Trump announced his plan to work toward correcting the "gross disparity" between Americans with access to employer-sponsored retirement savings plans and Americans without.

The plan, according to Trump, is aimed at Americans who currently don't have the option of an employer-sponsored plan. (More than 50 million Americans could be eligible for such a plan.)
To make it happen, the Trump administration is "expanding on an existing law passed under former President Biden called the Secure Act 2.0."
The plan announced by Trump would give those Americans "access to the same type of retirement plan offered to every federal worker."
Workers who want to take part could simply "check a box on their tax form to get things started," according to experts.
The new plan would include a $1,000 annual government match, according to President Trump.

Read more via Axios, CBS News, AARP

Immigration crackdown has changed how many new jobs the U.S. economy needs

The Trump administration's immigration enforcement actions have cut the number of new workers coming to the U.S. by 80%. That, experts say, is changing how many jobs the economy needs.

Immigration has collapsed: During the 2010s, the U.S. saw an influx of "about 1 million people per year" moving into the country. In 2025, that figure dropped to 500,000. Goldman Sachs predicts it will decline further to just 200,000 in 2026.
The economy needs fewer new jobs to “break even”: Because fewer immigrants means fewer new workers, Goldman Sachs predicts the economy will only need 50,000 new jobs per month by the end of 2026 to keep unemployment steady.
Immigration enforcement means some workers are going underground: Tougher immigration enforcement is pushing more immigrant workers into jobs that don't show up in government statistics, making it harder to tell what's really happening in the labor market.
Job openings keep falling: Available positions have dropped below pre-pandemic levels to around 7 million, while tech employment has seen a "notable drop," though that sector makes up a small slice of total jobs.

Read more via Fortune

Student loan delinquency rate surges to nearly 25%

Delinquency among federal student loan borrowers has tripled since 2019, with payment struggles concentrated among Black borrowers and residents of Southern states, according to analysis by The Century Foundation using University of California Consumer Credit Panel data.

Delinquency tripled in five years: The share of borrowers failing to make required payments reached nearly 25% in 2025, up from less than 10% in 2019. Roughly 7.9 million additional borrowers fell behind during the first nine months of 2025.
Credit damage is widespread: Approximately 2 million borrowers experienced significant credit deterioration, with typical scores dropping 100 points.
Racial disparities are dramatic: While 20% of white borrowers missed payments in Q3 2025, the rate among Black borrowers exceeded 48%.
Southern states have been hit hardest: Louisiana and Mississippi lead the nation with close to 40% of borrowers unable to meet their current payment obligations.

Read more via CNBC, The Century Foundation

Justice Department targets companies that pressure managers to make hiring decisions based on race or gender

The DOJ is investigating businesses that push supervisors to factor demographics into employment choices, with a senior official revealing Thursday that tracking diversity numbers and tying executive pay to demographic goals are top enforcement priorities.

What are investigators looking at? According to Brenna Jenny, an attorney with the DOJ's Commercial Litigation Branch, investigators are looking at companies that track workforce demographic goals, connect executive bonuses to diversity numbers, and require employees to create DEI-related goals affecting their pay or promotions.
Diversity tracking charts are under fire: Jenny criticized "color-coded charts" that treat "race and sex as performance metrics" instead of focusing on qualifications and merit. When executive pay is tied to demographic targets, she said, "the practical pressure is obvious."
Just the threat of enforcement is having an impact: Even without winning lawsuits, the administration has achieved "a huge, huge win for promoting its policy agenda" simply by threatening cases, according to experts.

Read more via Bloomberg Law

Are companies truly pulling back on DEI? Maybe not

While some businesses are genuinely backing away from diversity efforts under pressure from conservative activists and the Trump administration, others are simply swapping out terms like "equity" for words like "belonging" and "inclusion," according to legal and business experts.

Name changes don't necessarily mean substantive pulling back: Experts say instead of listening to what companies announce publicly, "watch what they do." Some companies are "replacing words like 'equity' with ‘belonging'" rather than abandoning the programs entirely.
Companies fear retaliation: Experts say many businesses fear retaliation if they don't appear to comply. This prompts organizations to be less vocal about DEI altogether.
Support hasn't disappeared completely: Even with public pressure, shareholders who support diversity efforts "can have conversations behind closed doors with board leaders," experts say.
Companies may feel stuck between a rock and a hard place: Experts say employers are navigating a balancing act, trying to avoid "federal targeting" while also avoiding boycotts from customers and internal strife within their organization.
Some big announcements may be mostly for show: Many announcements about dropping DEI are "kind of lightning rod, headline-generating activity," and may be more about optics than substance.

Read more via Marketplace, The Wall Street Journal

Goldman Sachs drops DEI from board selection criteria:

Goldman Sachs is removing DEI factors including race, gender identity, ethnicity, and sexual orientation from its board selection criteria after a conservative activist group that owns a small stake requested the change.

Goldman's governance committee will stop considering "other demographics" like race and sexual orientation when identifying potential directors, keeping only broader diversity factors like viewpoints, background, and work experience.
Goldman made the deal to avoid a shareholder fight after an organization "submitted a proposal in September demanding the change."

Read more via The Wall Street Journal

Trump administration crackdown on higher ed for antisemitism, hostile work environment continues:

The Department of Justice has filed a complaint against the University of California, alleging the university "fostered a hostile work environment against Jewish and Israeli faculty and staff at UCLA in violation of federal law."

The federal government is suing the University of California:

The complaint filed last week against the University of California relates to alleged "acts of antisemitism permeated UCLA following the Hamas-led massacre in Israel on Oct. 7, 2023."
Back in 2024, the EEOC launched an investigation into "alleged incidents of harassment at UCLA."
According to the complaint, the school "engaged in a “pattern or practice of discrimination” in violation of civil rights law against Jewish and Israeli employees by failing to prevent and correct discriminatory and harassing conduct."
A UCLA spokesperson says the university's policy against antisemitism is clear and that the school has taken steps to "combat antisemitism in a systemic and sustained manner."
EEOC Chair Andrea Lucas says the agency is "committed to eradicating antisemitism at work" and that "if a university will not investigate and remedy repeated allegations of antisemitism against its employees, then EEOC will."

The complaint filed last week is part of a larger effort by the Trump administration to combat alleged antisemitism on college campuses:

In January 2025, President Trump signed an executive order related to antisemitism, leading to the creation of a task force aimed at investigating "anti-Semitic harassment in schools and on college campuses." Over 60 universities are reportedly under investigation for potential violations of Title VI of the Civil Rights Act.
In July 2025, Columbia University agreed to pay $21 million in order to resolve EEOC antisemitism charges. The EEOC brought charges against Columbia in 2024 on behalf of Jewish employees, alleging the institution engaged in a "pattern or practice of harassment based on national origin, religion, and/or race, in violation of Title VII of the Civil Rights Act of 1964."
Late last year, Northwestern University agreed to pay $75 million to "settle investigations regarding antisemitism and to restore frozen federal funds." Brown University agreed to a payment of $50 million to do the same.

Talent, recruiting, & retention

Being long-term unemployed is a "mental war" for job seekers:

The share of Americans who have been unemployed for six months or more is growing, according to the Bureau of Labor Statistics.

"Official numbers" suggest a "relatively stable" labor market. Job growth in January was more than what economists had anticipated and unemployment fell (ever so slightly) to 4.3%.
However, the "share of people who’ve been out of work for six-plus months has been rising for the last three years."
25% of the total number of unemployed Americans have been looking for work for six months or more. "In most cases," individuals that are long-term unemployed will have "exhausted their unemployment insurance benefits."
Why is the share of long-term unemployed Americans on the rise? Job openings have been in a decline since the "hiring boom of 2022."
The decline in entry-level roles is having an impact on young workers in particular.

What's it like to be unemployed for six months or more? (Spoiler alert: not fun)

Those who have experienced it tell CNBC "the experience has chipped away at their confidence and made them question their career decisions."
While they say they are "doing everything by the job-searching playbook, and even trying new methods, but still nothing seems to be working."
Some say they have had to find part-time work. Others "have moved in with family."
Long-term unemployment can be a blow to confidence and self-esteem.
The lack of transparency from employers in the hiring process doesn't help, job seekers say.

The psychological impact is real:

Long-term unemployment can have a negative impact on both "psychological and physical wellbeing."
Experts say "emotional impact of unemployment can be profound."
Unemployment (even short-term) "can result in depression, anxiety, increased marital strife and a great risk of substance abuse problems."

Read more via CNBC, The New York Times

Walgreens is paying its workers to become pharmacists:

Faced with a serious shortage of pharmacists, Walgreens is covering the cost of prerequisite courses for employees who want to pursue the profession.

The shortage is real: Pharmacy school applications dropped by more than 64,000 between the 2011-2012 and 2021-2022 school years, with open pharmacist jobs now outnumbering expected graduates.
Walgreens' pilot program is growing: Walgreens' PharmStart pilot started in 25 states for nearly 10,000 full-time employees. As of January, just over 1,000 workers were accepted and 221 were taking classes. The company just expanded it nationwide.
What Walgreens covers: Workers get free prerequisite courses (all can be done online) and can earn an associate degree in Biological Sciences. The company also offers up to $40,000 yearly for pharmacy school if workers commit to four years at Walgreens after getting their license. Average pharmacy school debt exceeds $170,000.

Read more via HR Brew

Instead of a resume, Elon Musk wants to see just three bullet points:

Elon Musk is skipping traditional resumes and cover letters for Tesla's AI chip design team, asking only for three bullet points describing the hardest technical problems applicants have solved.

To join Tesla's Dojo3 AI supercomputer project, applicants submit "3 bullet points on the toughest technical problems you've solved." Musk used similar tactics at the Department of Government Efficiency and at X, preferring conversation over credentials.
Almost three-quarters of companies now use skills-based assessments during hiring, up sharply from only 56% the year before, according to TestGorilla's survey of 3,000 employees and employers.
Hiring expert Dr. John Sullivan told Fortune that AI makes all resumes look identical and perfect. "When every resume is perfect, has no spelling errors, flaws of any kind, imagine how many you have to sort."

Read more via Fortune

Technology & innovation

For anyone who hasn't been paying attention, here's a brief rundown of this week's drama involving Anthropic and the Trump administration.

The backstory: Anthropic held a $200 million Pentagon contract and was the only AI company with its model deployed on classified military networks. The dispute ignited after Claude was allegedly used (without Anthropic's prior knowledge) during a raid that captured Venezuelan President Nicolás Maduro.
The ultimatum: Defense Secretary Pete Hegseth gave Anthropic a hard deadline to grant the military unrestricted, "all lawful use" access to Claude or face consequences.
The refusal: Anthropic refused, saying it could not allow Claude to be used for fully autonomous weapons or mass domestic surveillance of Americans. Anthropic argued that its AI models aren't reliable enough without human oversight.
The fallout: When the deadline passed, Trump ordered all federal agencies to "immediately cease" using Anthropic products, and Anthropic was designated a "supply chain risk to national security."
Anthropic defends itself: Anthropic called the moves "retaliatory and punitive" and vowed to challenge the supply chain risk designation in court.
OpenAI's involvement: OpenAI then announced a deal with the Pentagon to deploy its models on classified networks. However, OpenAI CEO Sam Altman earlier said he agreed with Anthropic's red lines, prompting some to question how different the two deals actually are.
How is the AI industry reacting? Tech workers from OpenAI and Google signed an open letter in support of Anthropic's stance, while NVIDIA's Jensen Huang took a more neutral position.
What does the drama mean for the AI sector? Experts say the standoff between Anthropic and the federal government has set a potentially chilling precedent for how the government can pressure private AI companies.

Are employers being honest about AI prompting layoffs? Or are they "AI-washing"?

There's no shortage of employers explaining away layoffs by suggesting AI is to blame. But some people “wonder whether that explanation captures the full picture.”

Challenger, Gray & Christmas says employers cited AI in "announcements of more than 50,000 layoffs in 2025."
Amazon, Pinterest and Hewlett-Packard are among the firms that have mentioned AI with respect to recent job cuts.
But some experts say they suspect there's at least some "AI-washing" happening. (Forrester defined AI-washing as " attributing financially motivated cuts to future A.I. implementation.")
While the rationale for layoffs is often "more complex," explaining job cuts by mentioning AI may sound better, especially to investors.
Many layoffs that have been attributed to AI are still "anticipatory" in the sense that while AI may be able to do many of the jobs people are doing, it's not generally doing those jobs just yet.
Attributing layoffs to AI is a “very investor-friendly message," that experts say goes a long way compared to “the business is ailing.”

Read more via The New York Times, Gizmodo

Jack Dorsey announces major AI-induced layoffs at Block, says most companies will do the same:

Block, the payments company that includes both Square and Cash App, is laying off 40% of its workforce as a result of AI. The layoffs will impact 4,000 workers.

Block founder Jack Dorsey, who also co-founded Twitter, announced the layoffs last week, saying AI tools have “changed what it means to build and run a company.”
Dorsey told employees (and shared on X) that the "decision to cut jobs wasn’t because the company is in trouble."
Instead, Dorsey said he "wrestled with" deciding between cutting workers “gradually over months or years as this shift plays out, or be honest about where we are and act on it now.”

Read more via The Wall Street Journal

Tech companies are now mandating AI use and tracking adoption:

Major tech firms are integrating AI usage into employee performance evaluations and tracking productivity gains, with some companies even refusing to hire candidates who lack AI fluency.

AI competency becomes job requirement: Some tech leaders now say they won't consider hiring candidates without AI fluency. The Wall Street Journal reports that tech firms are incorporating tests on problem-solving using AI into candidate evaluation and some are developing ways to score candidates and employees on AI competency.
Manager expectations surge: 42% of tech-industry workers said their direct manager expects AI use in day-to-day work as of October 2025, up from 32% eight months prior.
Performance reviews now include AI metrics: Google is factoring AI use into some software engineer performance reviews for the first time this year. Meta is tracking how many lines of code engineers wrote with AI. Microsoft managers include AI use questions in performance discussions, and Salesforce added an AI fluency progress tracker to internal dashboards.
Mandatory AI tools expand: At Salesforce, employees can now file for paid time off only by interacting with an AI agent, with most self-evaluations and performance reviews done with AI assistance. An executive said "basically 100%" of employees use AI in some capacity.

Did AI contribute to U.S. GDP growth in 2025? It depends who you ask:

Some economists say AI investments made up a significant portion of 2025's U.S. GDP growth. But at least one Goldman Sachs analyst would beg to differ.

Federal Reserve Bank of St. Louis economists previously estimated AI investments made up 39% of GDP growth in Q3 2025, while Harvard economist Jason Furman posted that information processing equipment and software accounted for 92% of GDP growth in the first half.
Despite billions in tech spending on AI infrastructure, imported chips and hardware mean AI investments contributed almost nothing to U.S. economic growth, according to Goldman Sachs Chief Economist Jan Hatzius. Hatzius said AI investment had "basically zero" contribution to U.S. GDP growth in 2025, with much equipment imported from Taiwan and Korea, offsetting domestic spending in GDP calculations.
AI's impact on productivity remains unclear. Despite 70% of firms actively using AI, about 80% reported no impact on employment or productivity in a recent survey of nearly 6,000 executives across the U.S., Europe, and Australia.

About the Need to Know Briefing

The Need to Know Briefing is published weekly by Kelly, curating the most important workforce and hiring insights for HR leaders and hiring managers.

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