Jerome Powell says the AI hiring apocalypse is real: Job creation is pretty close to zero

Published: Thursday, October 30, 2025 at 4:30 pm

Powell Warns of AI-Driven Job Market Shift as Fed Cuts Rates

Federal Reserve Chair Jerome Powell has voiced concerns about the impact of artificial intelligence on the job market, signaling a potential "hiring apocalypse" as companies increasingly leverage AI to reduce headcount. Speaking after the Fed's decision to cut interest rates by a quarter point, Powell highlighted a slowdown in hiring, with many companies citing AI as a primary reason for layoffs and hiring freezes.

Powell noted that while the economy is still expanding at a moderate pace, job creation is nearing zero. He acknowledged that significant investments are being made in AI-related infrastructure, such as data centers, which are driving economic growth. However, he also emphasized the dilemma this creates for the Fed: AI boosts output but reduces the need for workers, leading to a softer labor market even as GDP remains positive.

Recent corporate announcements support Powell's warning. Amazon, for example, laid off a significant number of middle managers, citing AI-driven organizational restructuring. Other major firms have also announced cuts. A report indicates that U.S. employers have announced nearly a million layoffs this year, with a notable portion directly attributed to AI and automation.

Powell described the job market as "very low," with a low job-finding rate for the unemployed. Some economists have coined the term "Great Freeze" to describe the challenging conditions. This has led to a strategic shift, with many recent college graduates opting for graduate school.

Powell also pointed to a "K-shape" economic trend, where higher-income households and large corporations benefit from strong markets and AI-fueled productivity gains, while lower-income consumers struggle with rising costs. This uneven distribution of economic effects further complicates the Fed's balancing act between employment and inflation goals.

BNN's Perspective: The Fed's decision to cut rates reflects a cautious approach to navigate the complex economic landscape. While the investments in AI-related infrastructure are promising for long-term productivity, the immediate impact on the labor market requires careful monitoring. The Fed's balancing act between inflation and employment goals will be crucial in mitigating potential economic disparities and ensuring a stable economic future.

Keywords: Jerome Powell, Federal Reserve, AI, Artificial Intelligence, Layoffs, Hiring Freeze, Job Market, Economy, Interest Rates, Inflation, Employment, Automation, Great Freeze, K-shape, Economic Growth, Data Centers, Amazon, Target, Paramount

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