What if Labor-hoarding reversal as firms finally cut over-hired headcount?
After hoarding workers through the slowdown, firms use AI tooling to justify delayed layoffs, lifting unemployment and signaling a labor-cycle turn; the headcount reset pressures consumer spend even as it aids margins.
The butterfly cascade
How this trigger trickles across markets, left → right — the root shock, its first‑order moves, then the ripple effects. Drag any node; tap a market for its real price history.
Resolution timeline — how this probability is moving
Our model's odds (electric blue) over time vs the market's (Polymarket, amber), from the past toward the 1–3 years horizon. Each dot is a real macro event that nudged the probability — green pushed it up, red pushed it down. Tap a dot for the source. Loading the probability audit trail…
What it would mean
If this plays out, it is a risk-off shock. After hoarding workers through the slowdown, firms use AI tooling to justify delayed layoffs, lifting unemployment and signaling a labor-cycle turn; the headcount reset pressures consumer spend even as it aids margins. The trigger decomposes into signed root‑shocks — Job displacement ▲ · Consumer spending ▼ · Recession signal ▲ · Risk appetite ▼ — which propagate through our causal graph to the markets below.