Powell: AI is a "partial reason" for worsening US employment

Federal Reserve Chairman Jerome Powell stated that artificial intelligence is having some impact on US employment, but it is not the main cause. He expressed concern that the current AI wave could be more severe for the labor market than previous technological revolutions, potentially leading to an imbalance in job numbers, and that tools to address these impacts are still insufficient.

Is artificial intelligence harming US employment? The answer from Federal Reserve Chairman Jerome Powell is: somewhat. During a press conference, Powell said that AI is a "partial reason" for worsening unemployment rates, which is also one of the reasons behind the Fed's second rate cut in two months.

But he quickly added that AI is currently "not the main reason, and we don't know if it will be in the future." While Powell cannot determine the long-term impact of AI on the labor market, he acknowledged that this wave of AI might be worse than the technological revolutions of the past 200 years.

Previous waves of technology, although eliminating some jobs, also created enough new ones, "ultimately always balancing the number of jobs." However, the era of generative AI "may be different," he said. If that’s the case, "we don't have enough tools to cope with these social and labor market impacts."