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While artificial intelligence has induced turbulence within the labor market, the latest decline in job opportunities has extra to do with financial uncertainty, specialists say.
“As we look across the broader labor market, we see that AI’s impact on the labor market has still been fairly small,” mentioned Cory Stahle, a senior economist at Indeed, a job search website.
“The important asterisk is that that doesn’t mean that it has been zero,” he mentioned.
Mandi Woodruff-Santos, a profession coach, agrees, “I don’t think AI is to blame, I think the economic uncertainty is to blame.”
The state of the job market
The job market has not been good in latest months, whether or not you are looking for a job or at the moment employed.
The U.S. financial system added about 22,000 jobs for the month of August, whereas the unemployment price rose to 4.3%, according to a Bureau of Labor Statistics report on Friday. Economists surveyed by Dow Jones had been in search of payrolls to rise by 75,000.
Of those that are nonetheless employed, some are “job hugging,” or “holding onto their job for dear life,” in keeping with an August report by Korn Ferry, an organizational consulting agency.
But others are “quiet cracking,” which is a “persistent feeling of workplace unhappiness that leads to disengagement, poor performance, and an increased desire to quit,” according to cloud studying platform TalentLMS.
Growing financial uncertainty has stored employees from quitting their jobs and has led businesses to slow down hiring decisions, specialists say.
“No business knows what the heck the Trump administration is going to do next with the economy,” mentioned Woodruff-Santos.
“And in this kind of economic climate, companies are not sure of anything, and so they’re being very conservative with the way that they’re hiring,” she mentioned.
How synthetic intelligence is impacting the labor power
While some firms have introduced layoffs to pursue AI applied sciences of their organizations, a lot of the impact has been remoted within the tech business, mentioned Indeed’s Stahle.
Most lately, Salesforce CEO Marc Benioff said the corporate laid off about 4,000 buyer assist roles, because of developments within the firm’s use of synthetic intelligence software program.
Other research present AI has principally affected youthful employees fairly than mid-career workers.
An August report by Stanford University professors discovered that early profession employees (ages 22 to 25) in probably the most AI-exposed occupations skilled a 13% decline in employment. On the flip aspect, employment for employees in much less uncovered fields and extra skilled employees in the identical occupations has both stayed the identical or grown.
The research additionally discovered that employment declines are concentrated in occupations “where AI is more likely to automate rather than augment human labor.”
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Yet, the tech business itself is not a big sector, mentioned Stahle. According to a March 2025 evaluation by nonprofit commerce affiliation CompTIA, or the Computing Technology Industry Association, “net tech employment” made up about 5.8% of the general workforce.
Net tech employment is a designation that represents all these employed within the business, together with employees in technical positions reminiscent of cybersecurity and enterprise professionals employed by expertise firms, in addition to full-time and self-employed expertise employees.
For AI-driven layoffs to be thought-about a broad menace to the job market, the expertise wants to begin impacting different sectors, reminiscent of retail and advertising, mentioned Stahle.
‘We’re seeing increasingly more demand for AI abilities’
Some predictions on AI’s workforce impact contend that employers could also be extra more likely to retrain employees fairly than lay them off, according to a brand new report by the Brookings Institution, a public coverage suppose tank.
“AI may be more likely to augment rather than fully replace human workers,” the authors wrote.
In reality, “we’re seeing extra and more demand for AI skills,” mentioned Stahle.
If you’ve gotten the chance, specialists say, it is sensible to learn the way your area and employer are utilizing AI.
“You’d be foolish not to do the research into your own field,” and perceive how AI generally is a software in your business, mentioned Woodruff-Santos.
Look for coaching packages or webinars the place you’ll be able to take part or free trials of AI instruments you should use, she mentioned.
Correction: A brand new report got here from the Brookings Institution. An earlier model misstated the identify of the group.