There's rising concern that the increasing incorporation of artificial intelligence (AI) into businesses may be displacing human jobs. The current slowdown in the job market, one of the worst since the pandemic started, has led experts like Moody’s Chief Economist, Mark Zandi, to posit that the U.S. is in a "jobs recession," with AI's contribution being a contributing factor.
Several surveys by federal reserve banks suggest AI's role in reducing human labor. For instance, 12% of service firms employing AI reported employing fewer people due to AI utilization over the last six months. Almost 25% of firms intending to use AI anticipate a reduction in their workforce as a result, as per a New York Fed survey. A similar Dallas Fed survey found 10% of firms declaring AI lessened their labor needs.
There's a growing concern for early-career professionals, particularly in white-collar industries. Case in point, according to a Stanford University study, industries like software development, heavily impacted by AI, have seen a 6% employment drop for those between the ages of 22 and 25 since ChatGPT was released in 2022.
A Bureau of Labor Statistics report corroborates AI's effects on tech jobs. The report shows the economy added nearly a million fewer jobs over 12 months through March 2025 than initially estimated. The info sector saw the most significant downward revision, adding 67,000 fewer jobs or 2.3% less.
Economists predict that AI could replace 6% to 7% of U.S. jobs, notably computer programmers, accountants and auditors, legal and administrative assistants, and customer service representatives. Despite the concerns, some researchers are optimistic about AI's long-term impact. They argue that AI could enhance the economy's productivity, potentially raising the overall standard of living, analogous to what has happened following previous technological advances. However, the potential disruption AI could cause in the labor market is still uncertain.