Kevin Hassett, a top Trump economic advisor, said that AI is bringing about a ‘quiet time’ in the labor market
In a recent interview on CNBC’s “Squawk Box,” Kevin Hassett, a former economic advisor during the Trump administration, suggested that the rise of artificial intelligence (AI) is creating a “quiet time” in the labor market. Hassett pointed out that the remarkable productivity gains driven by AI may lead companies to pause hiring. He explained that businesses are finding their existing workforce increasingly efficient, which diminishes the immediate need to recruit new talent, particularly entry-level positions. This phenomenon is exemplified by a study from Stanford University, which predicts a nearly 20% decline in employment among young coders (ages 22 to 25) by 2025, as AI tools begin to replace these roles.
The context of this discussion is underscored by the current job market data, which reveals a concerning trend of weak hiring and increasing unemployment rates. In August, only 22,000 nonfarm jobs were added, significantly below the anticipated 80,000, with the unemployment rate rising to 4.3%, the highest since late 2021. This downturn has been further highlighted by significant layoffs, with major companies like Amazon and Target announcing substantial cuts to their corporate workforces, citing redundancy and a need for operational efficiency. Despite these immediate challenges, Hassett maintains a long-term optimistic view, arguing that AI will ultimately generate new job opportunities as market dynamics evolve and new spending avenues arise.
The Trump administration has been a strong proponent of AI development, implementing various initiatives to enhance the sector, including the ambitious $500 billion Stargate Project aimed at expanding data center infrastructure. While the administration’s efforts to foster AI growth may hold promise for future job creation, the current labor market freeze raises critical questions about the balance between technological advancement and employment stability. As businesses navigate this transformative landscape, the implications of AI on job availability and the overall economy will require close monitoring and strategic responses from policymakers and industry leaders alike.
https://www.youtube.com/watch?v=wsGlczwsIIY
Kevin Hassett said that AI is bringing about a “quiet time” in the labour market.
Leah Millis/REUTERS
Kevin Hassett said that AI is bringing about a “quiet time” in the labor market.
The Trump administration has aggressively promoted AI development and data center growth.
Recent job data shows weak hiring and rising unemployment.
A top Trump administration economic advisor has a theory on the
labor market freeze
.
Kevin Hassett, director of the National Economic Council, told CNBC’s “Squawk Box” on Monday that AI may be pushing worker productivity so high that employers are stepping on the brakes on hiring.
“There could be a little bit of, almost, quiet time in the labor market,” Hassett told show host Joe Kernen, “Because firms are finding that AI is making their workers so productive that they don’t necessarily have to hire the new kids out of college and so on.”
Hasset, however, maintains the position that AI will eventually create more jobs in the long run.
“Because there’s so much output growth and income growth, that’s the kind of thing that a free market will work out relatively quickly as, you know, new ways to spend money emerge,” Hassett said.
A study by a team of researchers at Stanford University found that AI is already
replacing entry-level coders
, causing a nearly 20% decline in employment of 22- to 25-year-old developers by July 2025 in comparison to the hiring peak in late 2022.
The Trump administration has aggressively promoted AI development. Trump has signed several executive orders aimed at easing regulations and expanding AI infrastructure, including initiatives to promote data center growth, such as the
$500 billion Stargate Project
.
The latest available data from the Bureau of Labour Statistics shows that in August, employers added just 22,000 nonfarm jobs, which fell well below Wall Street’s expectation of 80,000. The unemployment rate also ticked up to 4.3% in August, its highest level since October 2021, when the economy was still recovering from the pandemic.
No new jobs data have been released since the government shutdown, but in October alone,
Amazon
announced plans to eliminate about 14,000 corporate roles, while Target said it would cut 1,000 white-collar jobs to remove what it described as “overlapping work.”
The White House did not immediately respond to a request for comment.
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