Artificial intelligence may be lifting worker productivity so quickly that companies delay hiring, according to former National Economic Council director Kevin Hassett. Speaking on CNBC, Hassett said the U.S. labor market is sending “mixed signals,” even as output remains strong and GDP posted solid gains in the second quarter of 2025.
Hassett suggested that employers are finding AI tools efficient enough to meet rising demand without onboarding additional staff, particularly recent graduates. He emphasized that any slowdown should be temporary, arguing that rising output and incomes will eventually stimulate broader economic activity and drive new job creation.
The comments come as concerns persist about AI’s impact on entry-level roles, though the Trump administration has largely championed rapid AI development. President Donald Trump has signed multiple executive orders aimed at accelerating domestic AI infrastructure, including data center expansion.
AI policy has also featured prominently in recent political debates. Earlier this month, Trump AI and cryptocurrency adviser David Sacks said there would be “no federal bailout for AI,” responding to calls from industry leaders for government-backed support.
Hassett’s remarks also touched on affordability, noting that grocery prices have flattened during Trump’s second term, even as purchasing power rises, despite ongoing voter concerns about living costs.
