Lagarde: The European Central Bank is closely monitoring the impact of AI on the labor market, and so far, there has been no wave of layoffs

European Central Bank President Christine Lagarde stated that the ECB will closely monitor whether the widespread adoption of artificial intelligence leads to job losses, but she also pointed out that no signs of large-scale layoffs have been observed at this time.

Lagarde told European Parliament members in Brussels on Thursday that both Europe and the United States have seen significant AI investments, and some productivity improvements are already visible, but the impact on the job market is "currently not visible." She made it clear that the ECB will remain "extremely vigilant" regarding the potential employment consequences of AI.

This statement echoes concerns raised by Federal Reserve officials. Federal Reserve Governor Lisa Cook warned on Wednesday that the rise in unemployment driven by AI may exceed the capacity of monetary policy to respond; JP Morgan CEO Jamie Dimon also reiterated this week that AI technology could pose a risk of obsolescence for jobs such as truck drivers.

Productivity Improvement Observed, Employment Impact Not Yet Apparent

Lagarde stated that current academic literature shows that large-scale AI investments are bringing about a certain degree of productivity improvement, but the consequences for the job market have not yet appeared.

"The literature currently tells us that large-scale investments are driving some productivity improvements," she said, "but we have not yet seen the consequences for the labor market, nor the large-scale layoffs that the outside world is concerned about. We will remain extremely vigilant in the future."

She added that ECB data and surveys indicate that Europe is not lagging behind the United States, and the benefits of productivity improvements even extend to the small and medium-sized enterprise (SME) sector.

European Investment Following Suit, Not Falling Behind

In assessing the impact of AI on economic growth and inflation, Lagarde pointed out that the "wave of large-scale investment" in the U.S. has triggered "a lot of follow-up investments" in Europe, which is advancing in sync and benefiting equally.

"We are starting to see some identifiable results and data," she said, "Europe is not lagging behind; Europe is also advancing and benefiting from productivity improvements, including at the SME level, as revealed by our data and surveys."

Policymakers Facing Unprecedented Uncertainty

Lagarde also noted that the rapid evolution of AI poses new challenges for policymakers, as the speed of structural changes in the economy has far exceeded past experiences.

"These technologies only emerged three years ago, and the speed at which they iterate and evolve is, in my view, unprecedented," she said. "This is a combination of uncertainty, economic shocks, and transformative factors, with a speed that is hard to believe."

This statement indicates that the ECB is facing new challenges that traditional policy frameworks may not fully cover when assessing the impact of AI on inflation and employment prospects.

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