Goldman Sachs warns of AI-driven economic boost without labor market growth

Goldman Sachs released a statement on Monday that the U.S. may be entering an era of “jobless growth” due to the impact of AI. The bank noted that while GDP is growing, job growth has slowed and may remain stagnant in the years ahead.

Strategists at Goldman Sachs revealed that modest job growth and robust GDP growth are likely to continue. They said most potential growth stems from AI-driven efficiency. The bank’s strategists added that the labor supply would only be slightly impacted by population growth and decreased immigration.

Goldman Sachs believes AI is transforming the U.S. job landscape

Goldman’s latest report on AI’s impact comes as the U.S. grapples with the lack of official job data amid the government shutdown and the fallout from President  Trump’s import tariffs.

Goldman strategists also reported that employment growth outside the healthcare sector has declined recently. They noted that corporate management teams are increasing their focus on utilizing AI to reduce labor costs, which may have long-term implications for recruitment strategies. The strategists, however, pointed out that concerns of technology displacing workers are nothing new to economists and workers.

Over the last few years, AI has had a negative impact on the employment prospects of young tech professionals. Goldman analysts believe that employment growth has already turned negative in the most AI-exposed industries, even if the broader impact remains modest for now.

Goldman Sachs reiterated, “While we are skeptical of the boldest claims that rapid technological progress could lead to very high unemployment, some transitional friction is possible.” The firm explained that the economy’s adjustment to new technologies involves friction as a regular aspect of the process.

The bank noted that previous technology advancements have led to a brief rise in unemployment and a greater number of individuals switching careers. Goldman argued that the type of innovation matters, as some technologies create jobs, while others replace existing job opportunities.

Goldman Sachs warned that if AI primarily substitutes for labor, it could pose a greater challenge to maintaining full employment.

In the report, the bank’s analysts revealed that AI could “hollow out” middle-income white-collar roles, much like factory automation once displaced skilled blue-collar workers. Early evidence suggests that in some cases, the technology might help lower-skilled workers more than higher-skilled ones.

The analysts cited the “jobless recovery” of the early 2000s as an illustration. Tech-driven productivity helped the US GDP recover swiftly from the 2001 recession. However, overall employment remained stagnant for years as businesses used the crisis as an opportunity to reduce staff.

The report also emphasized that higher unemployment is not the only risk. AI could also widen inequality, as it rewards workers who can effectively use new technology while displacing mid-level jobs.

AI boom sparks market correction warning

October 3, 2025, Cryptopolitan covered a story in which Goldman Sachs CEO David Solomon warned of a possible 20% market correction driven by the AI-related speculative nature. Solomon said the surge in technology equities may resemble past market bubbles. 

Speaking at the Italian Tech Week, Solomon stated that given the rate of gains fueled by AI euphoria, a 20% market correction would not be shocking.  

Solomon also discussed more general economic and financial issues, pointing out the sluggishness of European regulatory procedures. He emphasized the necessity for more effective allocation of European savings into the “risk economy” and the tech sector.

Amazon founder Jeff Bezos, also present at the Italian Tech Week event, echoed Goldman Sachs’ CEO’s remarks. He said that investor excitement towards the AI boom is fueling a wave of indiscriminate funding.

Bezos added that although the hype cycle raises prices, the underlying technology remains viable and will eventually boost industry output.

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