Bloomberg Surveillance TV: October 30th, 2026

Nela Richardson · ADP

Bottom-income households are boosting earnings via overtime, not pay; sustaining that spending is questionable.

Richardson argues that base pay is roughly flat at about 3% a year, but earnings for the bottom income quartile are growing at double digits because those workers are putting in more overtime, shift work and extra hours. They are doing this to keep up with higher prices, so spending power is being maintained. She questions whether this can last, since it means working more to outrun inflation, and notes that the top earners' spending depends on the stock market wealth effect.

“everybody's getting about the same amount of base pay. They're getting about 3% from last year... Earnings is how much overtime, how many hours, what the bonuses are. That's where all the action is. And for the people at the bottom of the quartile in terms of income, they are working a whole lot more than everybody else.”at 12:15

Nela Richardson · ADP

Wages are not a source of inflation; ECI shows base pay normalizing near 3%.

Richardson says that wages are not a source of inflation, and she sees that in the employment cost index. Base pay is about 3% from last year, which she describes as normalized and boring. The argument rests on the ECI and on the fact that the wage growth at the bottom comes from working more hours, not from higher hourly rates.

“the key thing coming from the jobs market is wages are not a source of inflation, and that's the bottom line. You see that in the ECI.”at 16:17

Nela Richardson · ADP

AI's employment impact is modest overall but about 3% a year for early-career AI-exposed white-collar jobs.

Richardson's ADP Canaries dashboard, built with Stanford, tracks AI's employment impact monthly. Its finding is that the effect is not widespread, but it is about 3% a year for early-career workers in AI-exposed white-collar and IT jobs. Job gains are coming from health care, leisure and hospitality, while IT and information sectors are only about 2% of the labor market. The impact is concentrated at early career stages, since later-career workers are seeing more income and employment.

“It's actually been very modest, but for early career in AI exposed fields in white collar jobs and IT, yes we're seeing an impact of at about 3% per year. It's meaningful impact”at 17:16