AI Could Take US Unemployment to a Grim 10%

"The current unemployment rate in the United States is 4.2%, or about 7.5 million people, according to the Bureau of Labor Statistics. Artificial intelligence (AI) only needs to knock an additional 8 million people out of work for the unemployment rate to reach 10%, which is well above the level typically seen in a recession. It is actually the same as the monthly high point of the Great Recession."

"Executive outplacement firm Challenger, Gray & Christmas reported 153,074 job cuts last month. However, that figure is misleading. It only tracks announced job cuts that it can track. Modest or small layoffs across the nation are not part of its calculation. To make the point, the Challenger Gray numbers were based on only "450 individual job cut plans in October." That is a small reduction of the overall employment base in the country. "Plans" is not an exact measure."

"Goldman Sachs has the most carefully followed figure for total U.S. job cuts due to AI. It puts that figure at 6% to 7% of the U.S. workforce. That is about 10 million people. What Goldman does not say, exactly, is when those cuts will come. Goldman also notes that some jobs will be replaced by roles that require AI talent among people. It is hard to tell how many people that could be."

U.S. unemployment stands at 4.2%, roughly 7.5 million people, and an additional 8 million displaced workers would push the rate to 10%. Reported job-cut tallies undercount smaller, unannounced layoffs, as illustrated by a 153,074 figure based on 450 announced plans. Goldman Sachs estimates AI-related cuts could affect 6%–7% of the workforce, about 10 million people, though timing remains unclear. AI will most likely impact front-line retail and factory roles and mid-level white-collar and entry-level analytic positions, with early signs visible in bank and consulting layoffs.

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