US Labor Market – AI-Driven Tightness

Michael Esther
12-06 09:49

US labor market is tightening in a way that should unsettle everyone.

Jobless claims just fell to a 3-year low, while the unemployment rate has hovered under 4% for 23 straight months the longest streak since the 1960s.

Productivity, meanwhile, surged 4.7% last quarter, the fastest pace in two decades.

But here’s the part nobody wants to say out loud:

AI is doing the heavy lifting and it’s replacing more than it’s hiring.

Corporate surveys show 37% of firms have already automated tasks previously done by employees. Tech companies report efficiency gains of 15–30% after cutting staff. The average US worker now outputs the equivalent of 1.4 workers from 2019.

This isn’t a healthy labor market.

It’s a labor market being hollowed out in real time

made “stronger” because machines don’t quit, don’t sleep, and don’t ask for raises.

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