RPT-ROI-US jobs data forces gaze back from Mideast mayhem to AI 'doom': McGeever

Indeed, from this point on, the monthly payrolls reports and other labor market indicators such as the "JOLTS" job openings, layoff figures and weekly jobless claims are likely to be lightning rods for the "AI doom" debate ‌over whether the technology will end up destroying jobs, demand and economic growth. APOCALYPSE, HOW?

With war still raging in the Middle East, investors on Friday will, at least temporarily, turn their ​attention back to more familiar economic ground: U.S. jobs data. Events since the joint ‌U.S.-Israeli ​attack on Iran last Saturday have dominated market thinking so much that fears of artificial intelligence soon throwing millions of white-collar workers onto the scrapheap have been pushed to the back burner.

Friday's U.S. non-farm payrolls and unemployment figures for February will bring those concerns to the forefront of investors' minds once again, and depending on the details, perhaps to ‌the top of policymakers' agendas as well. The median consensus in a Reuters poll of economists is for a net rise in non-farm payrolls last month of 59,000, less than half of January's rise. The unemployment rate is expected to remain stable at 4.3%.

While it may be too early to see concrete evidence of AI-related labor market disruption, the jobs report will still be closely scrutinized for warning signs, including weak job growth, or even net job losses, and an unwelcome rise ‌in the unemployment rate. Indeed, from this point on, the monthly payrolls reports and other labor market indicators such as the "JOLTS" job openings, layoff figures and weekly jobless claims are likely to be lightning rods for the "AI doom" debate ‌over whether the technology will end up destroying jobs, demand and economic growth.

APOCALYPSE, HOW? Markets last week were awash with talk of the coming AI "apocalypse." Stocks wobbled, as investors sought to identify AI winners and losers, and bets on multiple Federal Reserve rate cuts this year rose. Helping to stoke fear was Jack Dorsey, CEO of Block Inc , who openly cited AI in his announcement on February 26 that he was firing nearly half of his workforce, even though the fintech company is "strong ... and profitability is improving."

There's a school of thought that Dorsey and other CEOs and chief ⁠financial officers may ​blame the expected disruptive power of AI for what are ⁠really just cost-cutting efforts – especially given the labor hoarding that occurred after the pandemic. But regardless, Dorsey's statement spooked investors because it came after a series of long-form research notes and blogs outlining the doomsday AI scenario had gone viral.

However, when assessing the impact of AI on the ⁠labor market, investors and policymakers must separate facts from noise. That means analyzing hard data, which are obviously often backward-looking. The challenge is using that to predict which way the wind is blowing. So far, the picture seems more balanced than the AI doomers would have you ​believe.

A recent study co-led by Harvard Business School Professor Suraj Srinivasan analyzed nearly all U.S. job postings from 2019 through March last year. It found that following ChatGPT's launch in November 2022, openings for routine ⁠jobs most likely to be replaced by AI fell 13%, but demand for more analytical, technical, and creative roles rose 20%. Economists at Goldman Sachs estimate that AI currently presents a headwind to job growth of 5,000-10,000 per month. In an economy that creates more than 30 million gross new jobs ⁠per year, ​that's negligible.

Although only 2.5% of workers are at risk of being replaced by current AI use cases, Goldman's economists estimate that 11 million jobs - 6-7% of the workforce - will be displaced by AI going forward. But the technology will create new jobs. "We therefore do not anticipate a job apocalypse," they wrote last week.

Other research points in the same direction. A Morgan Stanley survey of U.S. companies in January indicated that firms in industries most prone to AI adoption ⁠are more likely to hire or retrain workers than eliminate or not fill positions. And a Dallas Fed paper last week found that, so far at least, AI is both aiding and replacing workers.

The monthly U.S. employment ⁠reports are usually all about the headline figures. But with AI ⁠doomsday fears rife, the details beneath the headlines may now begin to take on much more significance and cut through the fog of war. (The opinions expressed here are those of Jamie McGeever, a columnist for Reuters)

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(By Jamie McGeever; Editing by Marguerita Choy)

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)