Why you shouldn't blame AI for the weak jobs data

By Hannah Pedone Economists and Wall Street analysts say there is very little overlap between February's labor-market weakness and AI's impact on jobs Analysts told MarketWatch that Friday's weak jobs data isn't clearly linked to artificial intelligence. The surprisingly weak jobs report for February seemed to confirm investor fears that artificial intelligence will replace thousands of workers. But there are a number of reasons to suggest those fears are overblown, at least for now. Data from the Bureau of Labor Statistics showed that nonfarm payrolls fell by 92,000 in February, one of the largest drops since the pandemic. The data follows an announcement in late February from financial technology company Block (XYZ) that it would lay off nearly half its staff in a bold embrace of AI. And earlier in February, Citrini Research published a blog post outlining a scenario in which AI would force widespread shifts in U.S. labor markets. But economists and analysts alike looked to assuage those fears, saying the loss of jobs in February is not related to AI. "This morning's adverse jobs report has little to do with AI's labor market impacts," David Autor, an economist at the Massachusetts Institute of Technology, said in an email to MarketWatch. He said while there's no single cause to pinpoint for the weak data, he believed it was more a function of all the uncertainty that U.S. employers are currently facing, including those related to fluctuating tariffs, military conflicts and whipsawing tax policy. Thomas Kennedy, head of real-estate investment strategy at J.P. Morgan Asset Management, agreed, telling MarketWatch that there "isn't much overlap" between the jobs report and AI's impact on the labor market. "The AI impact is largely in the future (if it comes at all)," he said. The government data showed the that sectors contributing most to the payroll decline in February included healthcare, manufacturing, construction and transport - and not those typically associated with facing AI disruption. "If AI is eliminating tech jobs en masse, software engineering jobs should be crashing as AI is particularly good at writing code," Kennedy wrote in an email prior to the release. He said that while software job openings are down from prepandemic levels, the actual number of jobs has increased substantially in the last six months. Separately, a study by economists at AI company Anthropic released on Thursday said that there is "limited evidence that AI has affected employment to date." The economists said the groups most exposed to AI disruption are likely to be "older, female, more educated, and higher-paid" workers and noted that exposed professions could see slowing employment growth in the long term. Read more: The stock market is reflecting fears of an AI apocalypse for white-collar jobs -Hannah Pedone This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal. (END) Dow Jones Newswires 03-06-26 1452ET