A new Federal Reserve study suggests the U.S. may be witnessing the early stages of AI-driven job displacement, with industries that adopted artificial intelligence most heavily now showing the highest unemployment increases. The research found a 0.57 correlation coefficient between AI adoption rates and rising joblessness, particularly affecting computing and mathematics professionals where AI usage reached nearly 80% while unemployment climbed 1.2% over three years.
What you should know: The St. Louis Fed research examined unemployment changes between 2022 and 2025 across different sectors, correlating them with AI exposure rates to identify potential displacement patterns.
- Computing and math professionals experienced the most severe impact, with AI adoption at nearly 80% coinciding with a 1.2 percentage point increase in unemployment.
- Personal services showed the opposite trend, with the lowest AI adoption rates and unchanged employment levels.
- Legal and social services sectors maintained around 18% AI adoption with negative unemployment rates over the study period.
The big picture: This analysis comes amid concerning labor market revisions that cut job creation numbers by 258,000 for May and June combined, raising questions about fundamental shifts in hiring patterns.
- The Bureau of Labor Statistics revised May’s job creation from 144,000 to just 19,000, while June dropped from 147,000 to 14,000.
- Despite widespread AI integration—with 23% of workers using generative AI weekly by late 2024—researchers note “we still know surprisingly little about AI’s employment effects because of the newness of the technology.”
Age matters significantly: Entry-level workers face the steepest challenges, while experienced professionals in AI-heavy fields are actually benefiting from the transition.
- Stanford research led by Erik Brynjolfsson found entry-level workers in AI-exposed occupations experienced a 13% relative decline in employment.
- Workers aged 22-25 in AI-augmentable roles like software engineering and customer service saw 6% employment declines since ChatGPT’s November 2022 launch.
- Conversely, experienced workers in the same professions enjoyed 6% to 9% employment increases, according to payroll data analysis.
What companies are doing: Goldman Sachs research reveals a strategic shift in hiring patterns rather than wholesale displacement across all roles.
- Their August Analyst Index found 58% of surveyed companies hiring at similar paces as early 2025, but concentrating new positions in AI-related roles.
- Companies are simultaneously pausing or eliminating headcount for non-AI positions, creating a bifurcated job market.
Tech sector context: The correlation between AI adoption and job losses may be amplified by broader tech industry corrections following pandemic-era overhiring.
- Former PayPal executive Keith Rabois noted in 2023 that many layoffs targeted “extraneous” employees doing “fake work” with minimal actual responsibilities.
- Meta’s Mark Zuckerberg launched his “year of efficiency” in 2023, shrinking headcount by 22%, while Google’s Sundar Pichai emphasized “removing layers to simplify execution and drive velocity.”
What they’re saying: Deutsche Bank analysts highlighted the significance of early AI displacement evidence appearing in labor data.
- “It’s one of the first high-profile reports to identify the effects of AI potentially showing up in labour market data,” Deutsche Bank noted to clients.
- The St. Louis Fed researchers emphasized the “remarkable adoption rate for such a nascent technology” while acknowledging the limited understanding of employment effects.
Recent Stories
DOE fusion roadmap targets 2030s commercial deployment as AI drives $9B investment
The Department of Energy has released a new roadmap targeting commercial-scale fusion power deployment by the mid-2030s, though the plan lacks specific funding commitments and relies on scientific breakthroughs that have eluded researchers for decades. The strategy emphasizes public-private partnerships and positions AI as both a research tool and motivation for developing fusion energy to meet data centers' growing electricity demands. The big picture: The DOE's roadmap aims to "deliver the public infrastructure that supports the fusion private sector scale up in the 2030s," but acknowledges it cannot commit to specific funding levels and remains subject to Congressional appropriations. Why...
Oct 17, 2025Tying it all together: Credo’s purple cables power the $4B AI data center boom
Credo, a Silicon Valley semiconductor company specializing in data center cables and chips, has seen its stock price more than double this year to $143.61, following a 245% surge in 2024. The company's signature purple cables, which cost between $300-$500 each, have become essential infrastructure for AI data centers, positioning Credo to capitalize on the trillion-dollar AI infrastructure expansion as hyperscalers like Amazon, Microsoft, and Elon Musk's xAI rapidly build out massive computing facilities. What you should know: Credo's active electrical cables (AECs) are becoming indispensable for connecting the massive GPU clusters required for AI training and inference. The company...
Oct 17, 2025Vatican launches Latin American AI network for human development
The Vatican hosted a two-day conference bringing together 50 global experts to explore how artificial intelligence can advance peace, social justice, and human development. The event launched the Latin American AI Network for Integral Human Development and established principles for ethical AI governance that prioritize human dignity over technological advancement. What you should know: The Pontifical Academy of Social Sciences, the Vatican's research body for social issues, organized the "Digital Rerum Novarum" conference on October 16-17, combining academic research with practical AI applications. Participants included leading experts from MIT, Microsoft, Columbia University, the UN, and major European institutions. The conference...