AI’s Workforce Impact Remains Limited Amid Rising Unemployment, Economists Say

The U.S. labor market showed signs of strain in August as employers added just 22,000 jobs—well below expectations—while the unemployment rate climbed to 4.3%, according to a Bureau of Labor Statistics report released Friday. Economists surveyed by Dow Jones had anticipated 75,000 new payrolls. While artificial intelligence has contributed to turbulence in the job market, experts emphasize that broader economic uncertainty is the primary driver behind recent hiring slowdowns.

“As we look across the broader labor market, we see that AI’s impact on the labor market has still been fairly small,” said Cory Stahle, senior economist at job site Indeed. “The important asterisk is that that doesn’t mean that it has been zero.” Career coach Mandi Woodruff-Santos agreed, stating, “I don’t think AI is to blame, I think the economic uncertainty is to blame.”

People working in an office | Source: Pexels

Analysts point to conservative hiring practices as businesses brace for unpredictable economic policies. “No business knows what the heck the Trump administration is going to do next with the economy,” said 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.”

While Salesforce recently laid off about 4,000 customer support roles due to AI-driven efficiencies, Stahle noted such impacts remain concentrated in the tech industry, which accounts for just 5.8% of the U.S. workforce, according to CompTIA. A Stanford University study found early-career workers in AI-exposed roles saw a 13% employment decline, while more experienced workers faced less disruption.