AI Cuts Into U.S. IT Job Openings, Raising Employment Concerns Amid Weaker Consumer Confidence

According to SemiAnalysis on July 8, artificial intelligence is driving job losses primarily in the information technology sector, even as broader labor market deterioration has not yet materialized. While U.S. consumer confidence has weakened, quit rates remain low, signaling that widespread layoffs have not occurred. However, AI-driven employment concerns may suppress wage growth and consumer spending, shifting economic growth from consumption to investment.

Despite weak consumer sentiment, the Federal Reserve is likely to maintain its current stance. With baby boomers retiring and immigration no longer significantly boosting the labor force, only 55,000 new jobs monthly are needed to keep unemployment stable at 4.3 percent. Market expectations for around 110,000 new jobs this month could still create downward pressure on unemployment, prompting the Fed to hold policy steady rather than respond urgently to deteriorating consumer sentiment.