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Is AI behind US hiring slowdown? Fed Chair weighs in
29 Jan 2026

Federal Reserve Chair Jerome Powell has addressed the impact of artificial intelligence (AI) on job growth and economic expansion.

He said that while the US economy is doing well, the effect of AI on employment remains uncertain.

"The US economy expanded at a solid pace last year and is coming into 2026 on a firm footing," Powell said Wednesday.

Powell acknowledges AI's impact on job market
AI influence

Powell acknowledged that the emergence of AI has already led to some short-term job losses. However, he stressed that it is difficult to predict its macroeconomic impact.

"You hear large companies saying...that they either won't be hiring for some time or that they're hiring less, or that they're laying people off," Powell said.

Powell compares AI's impact to past technological waves
Tech cycles

Powell compared the current situation with AI to previous technological advancements that have disrupted job markets.

He said, "Every technological wave will eliminate some jobs and create other jobs."

The Fed Chair emphasized that while disruption is inevitable, technology ultimately boosts productivity, which leads to higher wages.

Powell on AI's potential impact on economy
Economic effects

Powell said he is closely monitoring the situation and learning about the potential impact of AI on the economy, workforce, and society.

"It could certainly have pretty significant effects," he said.

However, he also noted that there are no tools to address concerns that may arise from this technological advancement.