Gee, what a strange, random coincidence: When industries go all-in on AI adoption, people might lose their jobs because of it.
The US “may be witnessing the early stages of AI-driven job displacement,” according to a report published at the end of August by the Federal Reserve Bank of St. Louis.
Fed researchers were interested in the sharp slowdown of the labor market in July’s jobs report, and, more broadly, they wondered to what degree “widespread deployment of large language models” was contributing to rising unemployment.
Perhaps you remember that particular jobs report: That’s the one that inspired President Trump to take the extremely unconventional move of firing the Bureau of Labor Statistics’s commissioner hours after the July results were released. July wasn’t a blip, though: August’s jobs report was also bad.
So, where does AI factor in? To determine which industries had the highest AI prevalence, Fed researchers analyzed more than 19,000 tasks from the Department of Labor’s O*NET database, which lists occupational characteristics and worker requirements, and determined “whether LLMs could reduce task completion time by at least 50%,” ultimately aggregating results “at the occupational level to create comprehensive AI exposure scores.”
They also looked at “real-world uptake patterns” from the Real-Time Population Survey “in which workers reported the intensity of their actual generative AI usage and time savings.”
Either way you slice it—theoretical or actual AI usage—researchers found “both measures reveal a striking correlation between AI’s prevalence and unemployment increases since 2022.”
Take it all with a grain of salt: The report’s authors were careful to stress that their findings “represent correlation, not causation,” considering that many factors, from economic uncertainty to monetary policy, could be driving “rising unemployment in AI-exposed occupations.”
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Still, an interesting correlation.
Between 2022 and 2025, occupations with higher AI exposure saw a higher unemployment rate.
“Computer and mathematical occupations—predictably among the most AI-exposed, with a score around 80%—saw some of the steepest unemployment rises,” the report noted. “Meanwhile, blue-collar jobs and personal service roles, which have limited AI applicability, experienced relatively smaller increases.”
Industries with high AI adoption similarly “showed the largest unemployment gains” in that time period. “Again, computer and mathematical occupations, which adopted these technologies most heavily, experienced substantial unemployment increases,” the report’s authors said.
“These patterns are particularly striking in technology sectors, where workers might expect AI to augment rather than to replace their roles,” they continued. “Unlike previous technological revolutions that primarily affected manufacturing or routine clerical work, generative AI can target cognitive tasks performed by knowledge workers—traditionally among the most secure employment categories.”
All the while, the researchers noted that because AI is such a new technology, potential longer-term benefits that could offset job displacement, like creating new jobs and industries, are currently unknown.
“If current trends continue, new approaches to workforce development, social safety nets and economic support for displaced workers may merit greater consideration,” the researchers said. “As we navigate this technological revolution, understanding potential early warning signs could prove crucial for protecting US workers and maintaining economic stability.”