Kevin Hassett, a top Trump economic advisor, said that AI is bringing about a 'quiet time' in the labor market

Kevin Hassett, a leading economic advisor from the Trump administration, has shared insights on the current state of the labor market, suggesting that artificial intelligence (AI) might be contributing to a notable slowdown in hiring. Speaking on CNBC's "Squawk Box," Hassett expressed that AI could be enhancing worker productivity to such an extent that companies are hitting the brakes on recruitment. "There could be a little bit of, almost, quiet time in the labor market," he remarked during his discussion with host Joe Kernen. He explained that firms may feel less urgency to hire new graduates due to the efficiencies brought by AI. Despite this cautious outlook, Hassett believes that AI will ultimately create more job opportunities in the future. He noted, "With the substantial growth in output and income, the free market typically finds ways to adapt as new spending avenues arise." This perspective is underscored by a Stanford University study indicating that AI is already replacing entry-level coding positions, leading to an anticipated 20% decrease in employment for developers aged 22 to 25 by mid-2025, compared to hiring levels seen in late 2022. The Trump administration has actively supported AI advancements, with former President Trump signing multiple executive orders aimed at reducing regulations and bolstering AI infrastructure. Among these initiatives is the $500 billion Stargate Project, designed to promote data center development. Recent data from the Bureau of Labor Statistics reveals that in August, only 22,000 nonfarm jobs were added, significantly lower than Wall Street's expectation of 80,000. Additionally, the unemployment rate rose to 4.3%, the highest figure since October 2021, during a period of recovery from the pandemic. Since the government shutdown, no new employment data has been released. In October, major companies like Amazon announced plans to cut approximately 14,000 corporate positions, while Target revealed it would eliminate 1,000 white-collar roles to streamline operations. The White House has not yet issued comments regarding these developments.