Federal Reserve Chair Jerome Powell says there is evidence that AI is already upending the workforce.
“I think my view, which is also a bit of a guess, but widely shared, I think, is that you are seeing some effects but it’s not the main thing driving it,” Powell said during a news conference after the conclusion of the Fed’s September meeting.
Overall, Powell said his view is that AI is probably a factor affecting the job market for recent college graduates, but it is “hard to say how big it is.”
“It may be that companies or other institutions that have been hiring younger people right out of college are able to use AI more than they had in the past,” he said. “That may be part of the story. It’s also part of the story, though, that job creation more broadly has slowed down.”
Powell is now one of the highest-profile figures to weigh in on the job displacement conversation that has upended Silicon Valley and split CEOs, some of whom lead the nation’s largest AI companies.
Anthropic CEO Dario Amodei sparked the debate earlier this summer when he told Axios that AI could wipe out half of all entry-level, white-collar jobs within the next one to five years. Ford CEO Jim Farley has also sounded a similar alarm.
Some rival leaders, including OpenAI’s Sam Altman, have questioned Amodei’s prediction. (Altman spoke at a Fed conference earlier this summer.) Anecdotally, some companies, including JPMorgan and Klarna, have said AI is already leading them to reduce their headcount.
In previous testimony before Congress, Powell said that AI had the potential to significantly change the economy.
“I think it has enormous capabilities to make really significant changes in the economy, in the labor force,” Powell said before the Senate Banking Committee in June. “It can either augment people’s productivity, or it can replace people, or it can do a little bit of both. But it’s going to be something.”
