Current labor market data shows little evidence of widespread AI-driven job losses, according to a former Bureau of Labor Statistics Commissioner.
The panic is loud. Barely a week passes without a headline about artificial intelligence (AI) eliminating jobs, gutting white-collar careers, and reshaping the U.S. economy at a pace no one can keep up with. But Erika McEntarfer, a labor economist at Stanford Institute for Economic Policy Research in California and former Commissioner of the Bureau of Labor Statistics (BLS), thinks it’s worth checking what the numbers actually say before drawing conclusions.
“I find facts are a lovely reality check on vibes,” McEntarfer told HRD America.
She’s been digging into the data and the research on AI’s labor market impact since her time leading the BLS, when she was asked about AI constantly during visits to Federal Reserve banks and data respondents across the country. Two years ago, she says, there wasn’t much to go on. Now there is.
Her overall read? The disruption is real in some corners, but it isn’t the broad catastrophe the headlines suggest.
“The available evidence to date suggests that AI’s impact on current labor market conditions is likely small right now,” McEntarfer said. “You can cut the data a million ways and mostly what you get is evidence of steady trends.”
That assessment is consistent with data from the U.S. Census Bureau’s Business Trends and Outlook Survey showing that only about one in five American companies are currently using AI in any business function, a figure that helps explain why broad labor market disruption hasn’t materialized yet.
Where are the job losses?
When you break down the unemployment data by which jobs are most exposed to AI, a counterintuitive pattern emerges. Yes, unemployment has been rising as the labor market softens, but it hasn’t been rising fastest among workers in AI-exposed fields.
“If anything, there’s evidence that it’s rising fastest among workers who are the least exposed to AI,” McEntarfer said.
According to McEntarfer, software developers — the classic example of an AI-exposed occupation — have actually seen steady, continued employment growth — a trend HRD America has been tracking as AI-driven tech job cuts are reshaping what HR leaders must do.
Researchers are currently debating whether software development jobs are growing as fast as they were before AI arrived, not whether they’re disappearing altogether.
“It’s not a story of mass displacements,” McEntarfer said. “What the aggregate trends are telling us is hiring has continued to happen apace.”
The aggregate hiring trends, explored in HRD America's analysis of how the May jobs report signals a tougher road ahead for hiring, points to a slowdown driven by factors well beyond AI.
The picture looks different for workers in occupations with a heavy physical component, such as construction laborers or dancers. McEntarfer says robotics hasn’t reached the point where those roles can be meaningfully automated, so they aren’t classified as highly exposed to AI. And right now, she says, those workers are faring worse in the job market than their tech counterparts.
Don’t blame AI just yet
One data point that has gotten significant attention is the decline in hiring of young workers in AI-exposed occupations. There’s real evidence for it, McEntarfer says. But she urges caution about what’s driving it.
“Hiring in those roles did start to decline in 2022,” she said. “The question is really, is that AI?”
Her answer is: we don’t know yet, and there are good reasons to be skeptical. The timing alone is worth scrutinizing. The decline starts in mid-2022, actually a few months before OpenAI’s ChatGPT launched publicly and more than a year before OpenAI released an enterprise version that businesses could even use with their own data.
“Why would you stop hiring a year before that even happens?” McEntarfer said.
There’s also the broader context of the past five years. The labor market has been through COVID-19, the rise of remote work, and a Federal Reserve rate-hiking cycle. All of these things affect demand for young workers, and all of them happened at roughly the same time as the rise of generative AI.
A Federal Reserve Board study found that employment growth among U.S. programmers dropped roughly 50% after ChatGPT launched, falling from around 5% annually to near flat in IT services and software development. Overall programming employment hasn’t collapsed, but the pace of growth has changed sharply.
Big picture, McEntarfer says, it’s a very tough labor market for young workers right now, and the story is bigger than AI. HRD America has also reported previously on why the collapse in junior hiring may be driven by remote work policy, not AI.
“When labor markets slow, it always hits young people the hardest because they’re the ones who are the most impacted by when hiring slows,” she said. “They’re trying to get on that job ladder; they’re trying to get that first job.”
“It’s really more of a story about the aggregate decline in hiring across all kinds of occupations than an AI story at the moment.”
What layoff data actually reveals
McEntarfer has a word of caution for anyone reading layoff announcements at face value.
“I do think there is a certain amount of AI washing going on in firms’ statements about layoffs,” she said.
Instead, she recommends looking at the firm’s underlying financials and at which roles are actually being eliminated.
“If you see something that looks like we thinned out a management layer, that’s typical cost cutting,” she said.
A genuine AI-driven reduction would show up in specific roles and specific teams, McEntarfer argues. The pattern would look different from a standard restructuring.
The low-hire, low-fire dynamic gripping much of the labor market right now has other drivers too: tariffs, immigration policy changes, geopolitical risk, and broader economic uncertainty. AI may be adding to that uncertainty, she says, but it’s one factor among many.
“Firms don’t know what impact AI is going to have on their business or on their hiring plans either,” McEntarfer said. “But right now we’re not at a place where firms actually understand how they can use AI to generate revenue.”
Hiring itself is changing fast
McEntarfer flagged AI’s impact on the hiring process itself as something she thinks deserves more attention.
“Hiring is one of the most disrupted things from AI right now,” she said.
AI-assisted resume screening, AI-conducted interviews, and candidates using AI to craft their applications have all become commonplace, and the research is still catching up. McEntarfer noted that AI interviewers appear to prefer AI-generated responses from candidates.
“They’re more predictable, they say fewer things that the AI can’t classify and label,” she said.
It’s a dynamic that puts HR professionals in a genuinely novel position. The profession, McEntarfer noted, is on the forefront of the change. And the trustworthiness of the hiring pipeline, from resume to interview, is a problem that didn’t exist even a few years ago.
The U.S. unemployment rate held steady at 4.3% in May 2026, according to the Bureau of Labor Statistics, with nonfarm payroll employment rising by 172,000 for the month. The macro picture, for now, remains stable. But McEntarfer’s broader message is that stability shouldn’t breed complacency. Organizations may still have time to prepare before AI’s impact becomes more widespread, but that window won’t stay open indefinitely.
