Trump Economic Advisor Warns AI Could Create 'Quiet Time' in Labor Market

AI could be causing 'quiet time' in labor market, top Trump economic aide Hassett says

Artificial intelligence could be increasing worker productivity so much that companies slow hiring, top Trump administration economic advisor Kevin Hassett said Monday. "I think that there have been mixed signals in the job market," the National Economic Council director said on CNBC's "Squawk Box," adding that he has seen "really, really positive signals in the output markets." After noting U.S. gross domestic product rose at a strong pace in the second quarter of 2025, Hassett said, "there could be a little bit of, almost, quiet time in the labor market, because 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 and so on." He maintained, however, that any AI-induced softness in the market would be temporary. "Because there's so much output growth and income growth, that's the kind of thing that a free market will work out relatively quickly as, you know, new ways to spend money emerge," Hassett said. Fears about AI replacing entry-level jobs are hardly new, but they have seldom been expressed by the Trump administration, which has championed the nascent industry and taken steps to expand its development in the U.S. President Donald Trump has signed multiple executive orders aimed at reducing regulatory barriers and promoting the development of AI infrastructure, including data centers. David Sacks, Trump's "czar" for AI and cryptocurrency, said earlier in November that there will be "no federal bailout for AI." His remark came after OpenAI CFO Sarah Friar said that her startup wants a federal "backstop" to support its infrastructure investments. Friar later walked back that comment. Hassett's comments also come as Trump and his allies have tried to refocus their messaging on affordability, after Democratic candidates who homed in on that issue won big in major elections earlier this month. Hassett said on Monday that overall grocery prices have not come down during Trump's second term, despite the president's claims otherwise. "People still are trying to dig out from the big hole that was dug by the previous administration's policies," he said. The cost of an average monthly grocery haul shot up during the Biden administration and "it's gone up almost not at all" since Trump returned to the White House, he said. He added that "purchasing power has gone up." "It's just kind of astonishing to me that the cost problem is somehow being blamed on us," he said.

Trump Administration Acknowledges AI's Impact On Labor Market Dynamics

Enter your email to get Benzinga's ultimate morning update: The PreMarket Activity Newsletter The Trump administration's economic advisor, Kevin Hassett, highlighted the impact of artificial intelligence on the labor market on Monday. According to Hassett, AI is significantly boosting worker productivity, which might prompt companies to slow the hiring of new graduates. CNBC reported that Hassett expressed concerns on CNBC's "Squawk Box." "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 and so on." Also Read: XRP Outgains Bitcoin, Dogecoin With 9% Rally -- Move To $10 Coming Soon? How AI Is Reshaping Labor Market Dynamics Hassett noted that despite the potential slowdown in hiring, overall economic indicators remain strong. He said that the U.S. gross domestic product grew robustly in the second quarter of 2025. "There could be a little bit of, almost, quiet time in the labor market," he said, attributing this to AI's role in enhancing productivity. However, Hassett emphasized that any slowdown would be short-lived. "Because there's so much output growth and income growth, that's the kind of thing that a free market will work out relatively quickly as, you know, new ways to spend money emerge." AI Job Concerns Meet A Shift In Economic Messaging Concerns about AI replacing entry-level jobs have been prevalent, but Hassett's comments mark a rare acknowledgment from the Trump government. The administration has been a strong advocate for AI development, with President Donald Trump signing executive orders to reduce regulatory barriers and promote AI infrastructure. As CNBC noted, Hassett's remarks come amid efforts by Trump and his allies to shift focus towards affordability. Despite Trump's claims about falling grocery prices, Hassett acknowledged that prices have not decreased during the GOP president's second term. Economic Balancing Act Of AI Efficiency Hassett reiterated that purchasing power has increased, despite persistently high grocery costs. "It's just kind of astonishing to me that the cost problem is somehow being blamed on us," he said, defending the administration's economic policies. Read Next: Sean Duffy Predicts Air Travel Will 'Slow To A Trickle' Ahead Of Thanksgiving, Says Pete Hegseth Offered Military ATCs Amid Staffing Woes Photo: Shutterstock This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Market News and Data brought to you by Benzinga APIs