SemiAnalysis: AI is changing U.S. employment expectations, and the Fed may still maintain a wait-and-see stance

BlockBeats News, July 8—SemiAnalysis, a semiconductor and AI independent research institution, said in a post that current U.S. consumer confidence continues to weaken, but the labor market has not yet shown clear deterioration consistent with this trend. The voluntary quit rate is usually the best indicator of consumer confidence in employment, and the number of people quitting voluntarily remains low, reflecting that employees are not generally choosing to resign. However, consumers have begun to show concerns about future employment prospects, and this sentiment is not driven by short-term factors such as oil prices. By contrast, the U.S. Conference Board’s Consumer Confidence Index and the voluntary quit rate move in closely aligned patterns, while the University of Michigan Consumer Sentiment Index appears more pessimistic and has a weaker correlation.

From industry data, over the past six months, job openings in the U.S. industrial, manufacturing, and import-related sectors have all increased. The major decline in job openings is mainly concentrated in the information services industry. Artificial intelligence (AI) is the first to impact industries with lower entry barriers. Market concerns about AI replacing jobs have gone well beyond the actual impact, and this panic itself may further suppress wage growth and consumer spending. That would shift the momentum of U.S. economic growth from consumption toward investment, even if there has not yet been a large-scale wave of unemployment caused by AI.

For U.S. non-farm employment data, the low voluntary quit rate and weak consumer confidence are not positive signals. But in the context of population aging, as baby boomers continue to retire and immigration is no longer significantly driving labor force growth, the number of additional jobs needed to keep the unemployment rate stable at 4.3% may be only about 55,000. After adding 172,000 jobs last month above expectations, the pullback in this month’s employment data still remains the baseline scenario. Even if the market generally expects about 110,000 new jobs, however, this level could still put downward pressure on the unemployment rate—making the Federal Reserve continue to take a wait-and-see stance rather than quickly adjusting monetary policy due to deterioration in consumer sentiment.