ZIRP is over but rates are not especially high and yet I don’t remember job market being that bad. Maybe employers are taking wait and see approach and avoid hiring developers they expect to layoff in a year or two if models will continue to improve and becoming cheaper at the current pace.

I think that models will improve and get cheaper. I think we'll see Opus 5.5 tier models open weights in six months.

You are probably right that some companies are factoring AI into headcount but I'd imagine that the interest rate and energy crisis are bigger concerns

Not that it explains all job market weirdness but you do have a problem on the hiring side with having to deal with the flood of AI generated applications. I assume that’s going to have a slowing effect on the typical apply/interview/hire process.