Goldman Sachs Reveals Surprising Insights on Labor Market and AI Trends in US Earnings Calls

In a recent note to clients, Goldman Sachs strategists outlined significant themes emerging from US earnings calls for the second quarter, focusing on the labor market, consumer behavior, and the impact of AI.

Labor Market Dynamics

Investor interest has reignited regarding the labor market following a disappointing payroll report in July. Despite this, Goldman’s economists have highlighted that job openings indicate a robust demand for labor. The increase in the unemployment rate to 4.3% is attributed mainly to temporary layoffs and challenges in labor supply, especially among new immigrants.

Company commentary this quarter largely reflects a healthy labor market.

While some firms have hinted at reducing headcount or slowing hiring, the overall sentiment points to a more balanced relationship between hiring needs and available talent. The percentage of companies mentioning labor shortages has reverted to pre-pandemic levels, with minimal references to layoffs during the second quarter.

Consumer Sentiment

Goldman Sachs reports mixed sentiments regarding consumer behavior during the second quarter. Some companies have noted weaker sales amidst macroeconomic pressures, while others have reported resilient consumer spending. Conversations often revolved around product affordability and the contrasting circumstances between low- and high-income consumers.

The US Consumer Dashboard indicates that the consumer sector remains relatively healthy, although data reveals growing disparities in income growth and sentiment between different income groups.

AI Investment Trends

On the AI front, earnings calls have shown a strong enthusiasm for the technology, particularly regarding the substantial investments needed to leverage it. Major players like Amazon, Google, Microsoft, and Meta are under scrutiny as investors evaluate the demand for AI products and their respective investment plans.

Following earnings reports, consensus estimates for the capital expenditures and R&D of hyperscalers for 2025 increased by 3%. This trend of ongoing investment is also visible in companies that support AI infrastructure, such as data center REITs and semiconductor manufacturers.

Continued investment in AI is expected to provide a tailwind for these businesses.

AI infrastructure stocks have outperformed the equal-weight S&P 500 by 20 percentage points year-to-date, contrasting with a 3 percentage point underperformance for stocks linked to AI-enabled revenues and long-term productivity gains.