Is your job under threat from AI? Here’s what we know now
USA TODAY’s money reporter Rachel Barber looks at how AI is impacting the U.S. job market.
After more than a month of delays due to the longest government shutdown in U.S. history, the Bureau of Labor Statistics released its September employment report on November 20th.
U.S. employers added 119,000 jobs in September, more than expected, the report said. The unemployment rate rose slightly from 4.3% to 4.4%. Employment growth for July and August was revised downward by 33,000 jobs, indicating an even weaker labor market than believed at the end of the summer.
Amid the lack of recent government statistics, stubborn inflation, and a divided Federal Open Market Committee, it remains unclear how these insights will affect the Federal Reserve’s December interest rate decisions.
The report, originally scheduled to be released on October 3, will reflect what was happening before the shutdown began. The labor market may have changed since the data were collected.
The BLS confirmed on Nov. 19 that it would not release a complete standalone U.S. employment report for October, instead saying it would release October payroll data along with the full report for November. The agency added that the November jobs report, originally released on Dec. 5, will be released on Dec. 16, six days after the Federal Open Market Committee concludes its final two-day meeting of the year.
How is the current job market?
Before the government shutdown, economists and policymakers had high hopes for the September jobs report after an August report showed the U.S. economy had added only 22,000 jobs, down from July’s 73,000 gain, which saw job gains over the past two months revised down by 258,000.
As government statistics on the employment situation for October were not released, attention focused on private sector indicators. Employers cut more than 150,000 jobs in October due to cost-cutting and increased adoption of artificial intelligence, according to a report from Challenger, Gray & Christmas.
A combination of layoffs at some companies and a slowdown in hiring suggests tough times for job seekers.
“As the flow of data resumes, our understanding of the economy may need to adjust to reality, and so should financial markets,” Bankrate senior economic analyst Mark Hamrick said in a Nov. 17 note. “The volatility is not surprising as the Fed approaches another major decision on interest rates and consumers are feeling the one-two punch of rising prices and a slowing job market.”
Which industries are hiring?
Health care, which has been a steady employment engine in recent years, added 43,000 jobs in September. Food services and restaurants added 37,000 jobs, and social assistance added 14,000 jobs.
Meanwhile, 25,000 jobs were lost in transportation and warehousing, and federal employment continued to decline in September, dropping an additional 3,000 jobs after months of mass layoffs.
There was little change in payrolls in other major industries in September, including mining and quarrying, oil and gas extraction, construction, manufacturing, wholesale and retail trade, information, financial activities, professional and business services, and other services.
Will the Fed cut rates in December?
The Federal Reserve appears to have cut interest rates in September and October in response to growing concerns about a cooling job market, but further cuts are not guaranteed.
Federal Reserve Chairman Jerome Powell said in a press conference after the Federal Open Market Committee’s latest meeting that voting members disagree on how to proceed in December.
“For some on the committee, it may be time to take a step back and look at whether there really are downside risks to the labor market or whether the growth that we’re actually seeing, stronger growth, is real,” Powell said.
Oxford Economics believes the split committee is likely to leave interest rates unchanged in December, with a “solid economic outlook” and persistent inflation likely to slow the pace of rate cuts next year.
“Some of those who supported the rate cut could have supported leaving policy unchanged, while some opposed the rate cut,” Michael Pearce, deputy chief U.S. economist at Oxford Economics, said in a Nov. 20 note. “With a lack of official labor market data, there was little to persuade or dissuade policymakers about the downside risks to the job market.”
As of Nov. 20, futures markets expect the central bank to keep interest rates in the 3.75-4% range in December.
This is a developing story and will be updated.
Contact Rachel Barber rbarber@usatoday.com X Follow her at @rachelbarber_
