The U.S. job market seems like it’s stuck mostly in neutral.

The Chicago Fed’s jobless gauge came in at 4.3%, and that says it all: steady, but anything but strong.

ADP reports losses, while small firms continue trimming their staff, and corporate hiring plans are hitting 15-year lows.

Still, layoffs aren’t spiraling — it’s just a slow drift, not a downturn. The Fed’s watching closely with another quarter-point cut potentially coming if the current stall turns into a slump.

Still, for an economy that’s growing at nearly 3.8% in Q2, that level of softening feels surprisingly disconnected. We’re seeing growth powering ahead while hiring cools, which is an unusual Fed-cycle story.

That said, an eye-opening new report from the Bank of America Institute seems to hold one clue.

It points to an undercurrent that’s effectively reshaping productivity, spending, and how businesses operate, but not necessarily how they hire. From AI-powered capital expenditure growth to data center construction, something unique is brewing beneath the surface.

The robots aren’t taking over just yet, at least not in the data.

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Bank of America says AI boom isn’t hitting payrolls just yet

AI could be powering U.S. growth, but the job market hasn’t quite experienced the same lift, at least not yet. 

The Bank of America Institute states that AI is responsible for giving the GDP a sizeable bump this year, adding nearly 1.3 percentage points in Q2 alone. That’s a huge swing for an economy that’s still shaky from early-year jitters.

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The October 22 report credits AI-related capex forthe expansion on track. The GDP rebounded 3.8% in Q2 following a relatively soft Q1, with small businesses joining the AI party, while tech payments rose 6.9% year over year in September.

Construction and manufacturing sectors are leaning in as well.

The twist is that despite all the spending, the job impact is surprisingly muted. The data currently show very little evidence of mass layoffs or even major hiring booms linked to AI adoption. 

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“There is a slightly negative correlation between higher AI usage and employment growth,” the report noted, but it’s “insignificant.” 

In fact, industries such as finance, professional services, and information technology are adding jobs alongside heightened AI usage, throwing greater weight behind the productivity story at this point.

Takeaways on AI and the workforce:

  • AI added up to 1.3 points to Q2 GDP, leading to a robust rebound.
  • Small businesses continue boosting tech spending, which is up 6.9% year over year, joining the AI wave.
  • Job impact remains minimal, with AI lifting productivity rather than leading to job cuts.

AI’s job shock isn’t here yet

For all the doomsday talk, the big shock from AI on the labor market still hasn’t arrived.

Through 2025, the U.S. labor market remains mostly intact. In fact, Yale’s Budget Lab recently said that there’s been “no discernible disruption” 33 months following ChatGPT’s debut.

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Perhaps the only caveat is that workers aged 22–25 in highly automatable jobs witnessed a roughly 13% employment dip, while their older cohorts held steady. 

Further, outlets like McKinsey, IMF, and Goldman Sachs all feel the coming decade will be a slow burn. They expect that up to 30% of U.S. work hours to be automated by 2030, but that productivity gains will outweigh early layoffs. 

Silicon Valley’s own bosses feel mostly upbeat about AI’s impact.

Google’s Sundar Pichai likens AI to more of an “accelerator” that makes engineers “dramatically more productive.” 

Also, OpenAI’s Sam Altman sees a “world significantly underemployed,” feeling that there’s still a lot more code to write than humans can handle. To back that up, BLS forecasts show an 18% jump in software developer jobs by 2033, expecting database and architecture roles to increase by a superb double digits. 

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