Unemployment and AI

The US Bureau of Labor Statistics (BLS) releases the Employment Situation report for March 2026 today, at 8:30am. What’s to be expected? The labor market showed signs of weakness in February: Nonfarm payrolls unexpectedly declined by 92,000 jobs and the unemployment rate rose to 4.4% (from 4.3% in January). Factors included a healthcare worker strike, weather impacts, federal government job cuts, and broader slowdown in hiring momentum. Consensus for March expects Nonfarm payrolls gain of around 60,000 jobs and an unemployment rate to hold steady at 4.4%. Perhaps the key point is how long will it take for the unemployment rate to reflect the impact of AI in the real economy; are companies firing workers on a net basis? And the crucial one: can the Fed do something about it? Can lower interest rates change anything when you have a tech based paradigm shift? We might find ourselves in an economic environment where productivity grows and unemployment rises. We are 18 months away from mass production of Optimus, the humanoid robot from Tesla that will replace workers on factory lines, airports, etc and the NYC Health + Hostpitals (the biggest public health system in the country) has announced it will use AI for radiologist work instead of humans. Perhaps it’s the smallest implication, but The Fed might need to change its mandate.

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