Trump's top advisor says AI could be causing 'quiet time' in labor market — should you be worried?

After the surge of AI triggered by ChatGPT's rising popularity in the past few years, experts, business leaders, and professionals have been speculating whether it can take away jobs from humans. The latest to comment on it is the Director of the National Economic Council of the United States, Kevin Hassett, who said that artificial intelligence has brought a 'quiet time' in the American labor market as firms lack the need to hire youngsters fresh out of college. Speaking on CNBC's "Squawk Box," Hassett stated that there has been some uncertainty in the job market, which may be fleeting.

“I think that there have been mixed signals in the job market,” Hassett said, adding that he has seen “really, really positive signals in the output markets.” He further noted that the U.S. gross domestic product witnessed a sharp increase in the second quarter of 2025, before making his observation on the labor market. “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," Hassett said in the interview.

Hassett's observations may correlate with on-ground reality, as a recent study by a team of researchers at Stanford University found that AI is already replacing entry-level coders. The study found that his trend has caused a 20% drop in employment of 22 to 25-year-old developers by July 2025, as compared to the hiring peak in late 2022. The labor market has softened as well, as the latest available data from the Bureau of Labor Statistics shows that firms added only 22,000 non-farm jobs, well below Wall Street's expectation of 80,000 jobs, Business Insider reported.

The unemployment rate went up to 4.3% in August, marking the highest level since October 2021, when the economy was recovering from the impact of the COVID-19 pandemic. Since no new job data is available for the month of October due to the government shutdown, factors like Amazon cutting 14,000 corporate roles and Target cutting 1,800 white collar jobs indicate that things may not have gotten better in the last month.

The Trump administration has rarely addressed the fears around AI taking away people's jobs. In fact, President Trump has aggressively fuelled the AI push by signing multiple executive orders aimed at reducing regulatory barriers for the development of infrastructure. This includes the initiatives to promote data centers, such as the $500 billion Stargate Project. 

However, Trump's aide, Hassett, maintained that the softness in the job market induced by AI 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,” he stated.

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