White House Economic Advisor: "AI Productivity Gains May Lead to Temporary Employment Downturn"

Kevin Hassett Speaks in CNBC Interview
"Since Trump’s Second Term, Grocery Costs Have Barely Increased"

A senior economic advisor at the White House has expressed the view that artificial intelligence (AI) innovation could lead to a temporary downturn in the labor market.

Kevin Hassett, Chairman of the White House National Economic Council (NEC). Photo by AP Yonhap News

Kevin Hassett, Chairman of the White House National Economic Council (NEC), said in an interview with CNBC on the 17th (local time), "As AI boosts worker productivity, companies are increasingly deciding that there is no need to hire new college graduates." He added, "As a result, the labor market may experience something of a 'quiet time.'" He continued, "There are mixed signals in the labor market," noting, "In the production sector, we are seeing very positive signs."

He explained that the strong growth rate of the gross domestic product (GDP) in the second quarter of 2025 supports this trend. The United States posted a real GDP growth rate of 3.8% on an annualized basis in the second quarter compared to the previous quarter.

However, he predicted that the AI-induced slowdown in employment would not become a long-term trend. Chairman Hassett emphasized, "Production and income continue to increase," and said, "When new ways to spend money emerge, the free market will resolve these issues relatively quickly." He explained that increased income would naturally lead to new consumption and investment, resulting in a recovery in labor demand.

Although concerns have been consistently raised that AI will replace human jobs, it has been rare for the Donald Trump administration, which is pursuing AI deregulation and infrastructure development-unlike the previous Joe Biden administration, which focused on AI regulation-to directly address such concerns.

Additionally, Chairman Hassett commented on the renewed attention to the burden of living costs and inflation following the Democratic Party's sweeping victories in recent elections in New York City and the states of New Jersey and Virginia. He said, "It is somewhat surprising that we are being blamed for cost issues." He argued, "People are still struggling to get out of the deep hole dug by the previous administration's policies. Under the Biden administration, the average monthly cost of groceries rose significantly, but since President Trump returned to the White House, it has barely increased. Purchasing power has also risen."

This content was produced with the assistance of AI translation services.