The labor market is facing significant changes due to the rise of Artificial Intelligence (AI), according to Kevin Hassett, Director of the National Economic Council (NEC). Speaking to CNBC on November 17, 2025, Hassett described a “quiet time” in the job market as AI reduces the need for entry-level positions. This shift highlights the dichotomy between strong economic output and mixed signals in employment trends.
Hassett emphasized that businesses have found AI tools to enhance worker productivity to such an extent that hiring new graduates is becoming less necessary. “Firms are finding that AI is making their workers so productive that they don’t necessarily have to hire the new kids out of college,” he stated. Despite this, he noted that the overall economic indicators, including a gross domestic product (GDP) close to 4% and productivity around 3%, suggest positive growth.
The implications of this development have raised concerns among various economists. Spencer Hakimian, founder of Tolou Capital Management, interpreted Hassett’s comments as indicative of potential recessionary signals. He shared the interview on social media, suggesting that the current trajectory could lead to economic downturns.
California’s technology sector has been particularly affected by these changes. Not only is the industry grappling with automation, but it is also facing challenges related to crime, taxation, and the complexities surrounding H-1B visas for skilled workers. This combination of pressures has led to significant job losses in tech roles.
As discussions continue regarding the impact of AI on employment, debates are emerging about the role of immigration in the labor market. Ron DeSantis, the Republican Governor of Florida, has called for legislative action to eliminate H-1B visas, arguing that they contribute to the influx of foreign labor that undercuts American workers. His remarks followed a series of statements from Donald Trump, who has expressed concerns about the United States lacking the talent necessary to produce advanced technologies, such as batteries.
As AI continues to evolve, the future of the labor market remains uncertain. With entry-level roles being diminished and the potential for skilled positions to be impacted by immigration policy, the conversation around employment and economic strategy is likely to grow more complex. The balance between technological advancement and workforce needs will be crucial in determining the direction of the U.S. economy in the coming years.
