AI and jobs: the AI bubble may affect hiring

Canada's unemployment rate is reported at 6.8 per cent with youth joblessness elevated, and studies cited in the article find little evidence so far that AI adoption is driving large-scale layoffs.

Canada's job market is described as weak and youth unemployment is elevated. The Bank of Canada noted unemployment at 6.8 per cent and said relatively few businesses plan to hire more workers. Employers often cite AI as a reason to slow hiring, but several studies and reporting find limited evidence so far that AI is causing large-scale layoffs. At the same time, heavy capital flows into the AI sector are concentrating growth in that industry while hiring and wage growth elsewhere have slowed. Key facts: - The Bank of Canada reported an unemployment rate of 6.8 per cent and particularly elevated youth unemployment. - A cited study found fewer than 5 per cent of last year’s U.S. layoffs were linked to AI adoption, and other research has found little disruptive impact so far. - Large capital flows into AI firms are supporting strong activity in that sector even as hiring, wage growth and consumer confidence are weaker in much of the broader economy. Summary: The article notes that AI is frequently blamed for hiring slowdowns but that current evidence points more to cyclical and investment-concentration factors, with particular risks for recent graduates who face a tight labour market. Undetermined at this time.