AI may lower inflation while reshaping the job market.

An economist forecast that AI-driven productivity could push U.S. inflation below 2% next year. Analysts also reported that increased automation may reduce hiring in some sectors.

AI is being linked to lower inflation and changes in employment in recent forecasts. An economist at Alpine Macroeconomics reported that productivity gains from AI could bring inflation below 2% within about a year. Falling prices would ease household budgets for people who remain employed. At the same time, automation and related business shifts may reduce hiring and displace some roles. What we know so far: - An Alpine Macroeconomics strategist forecast that AI-driven productivity could push inflation under 2% in the near term. - Economists and industry leaders say AI can lower costs by automating tasks and increasing output. - Lower inflation could prompt the Federal Reserve to ease interest rates if the trend persists. - Observers report that automation is already slowing hiring in some areas and may lead to job displacement for certain roles. - Some short-term price pressures have been reported, including higher electricity costs near energy-intensive AI data centers and effects from tariffs. Summary: If AI reduces costs as forecast, consumers could see slower price growth and monetary policy may ease in response. The labor market could adjust unevenly, with slower hiring and job losses in some sectors. Undetermined at this time.