The industries which raced toward artificial intelligence may already be reaping the rewards of their gamble, but it seems at last their staffers might also be paying the price.
According to a St. Louis Fed study released last week the U.S. “may be witnessing the early stages of AI-driven job displacement,” with a weighting toward the sectors which adopted the emerging technology most heavily.
The weaker picture of the economy prompted a raft of questions: Is hiring slowing because of fears over Trump’s tariff plan? Is the employment market slowing because of uncertainty more widely? Or is there a factor which is fundamentally reshaping the labor market?
We have also heard the many, many warnings about jobs displaced due to AI. Is there a possibility that this is driving the underlying shake up?
What the FRED can chart is the percentage point change in unemployment between 2022 and 2025 in certain industries, and its correlation to AI exposure in each of the sectors.
The research showed a correlation coefficient of 0.57, meaning generally the occupations that embraced generative AI most intensively showed the largest unemployment increases. Those sectors included, at the extreme end, computers and math. In these professions, AI adoption was at a little under 80% while the unemployment change increased by 1.2% over the past three years.
Of course, if you’ve checked in on tech employment over the past three years AI hasn’t been the only story in town. Big Tech especially was criticized for overhiring during the pandemic, prompting a wave of layoffs in the years following.
At the opposite end of the spectrum, industries with lower AI adoption rates are seeing relatively unchanged employment levels. The personal services industry, for example, had the lowest adoption rate of the sectors surveyed and had an unchanged employment rate.
Likewise, the legal and social services sectors had an adoption rate of around 18% and negative unemployment rates over the past three years.
There’s also evidence to suggest that AI can be more disruptive to careers depending how recently a person has joined the labor market. For example, a landmark study led by Stanford Professor Erik Brynjolfsson last month found entry-level workers in the occupations most exposed to AI are already experiencing a 13% relative decline in employment.
“By contrast, there has been a 6% to 9% increase in employment for more experienced workers in the same professions, the study found, citing payroll data.”
Goldman Sachs also noted a change in hiring due to artificial intelligence in a research note Monday—but not because of displacement. The Goldman Sachs Analyst Index for August found 58% of surveyed analysts reported the companies they cover are hiring at about the same pace as at the beginning of 2025—but concentrated in AI-related positions. Conversely, companies were pausing or axing headcount for non-AI-related roles.
