Labor markets all over the world are on the cusp of being influenced heavily by artificial intelligence (AI), which promises to boost productivity and help fill in gaps in the job market.
The effect of AI is already being felt in particular niches of the US economy, says Joseph Briggs, who co-leads the global economics team in Goldman Sachs Research. “You can see AI’s impact in the tech sector, where the employment share as a proportion of the whole economy has gone below the long term trend,” he says.
How will AI impact jobs?
In Briggs’ base case, the timeline for firms to adopt AI on a wide scale is around 10 years, and 6-7% of workers will be displaced during that transition period. The question, he says, is: How quickly will this transition occur? If it takes place over a decade, Goldman Sachs Research expects to see a 0.6 percentage point increase in the unemployment rate. “But if it’s more frontloaded, the impacts on the economy are much larger,” Briggs says.
Apart from tech workers, others in the knowledge and creative sectors, such as management consultants, call center workers, and graphic designers, have also seen some displacement of their labor by AI, but these are relatively small parts of the overall job market. As yet, no significant AI-led changes in the employment mix across the whole US economy have shown up in labor data.
Going forward, though, Briggs expects AI to have a much larger impact on labor. Globally, around 300 million jobs are exposed to AI automation. In the US, AI can potentially automate tasks that account for 25% of all work hours, Briggs’ team finds.
Workers who are likely to be displaced from the knowledge industries by AI may be less suited to the kinds of labor that are most needed, says Evan Tylenda, an analyst with GS SUSTAIN.
On the one hand, these include low-skill, low-wage jobs: fast-food workers, cleaners, home healthcare workers, for instance. On the other hand, the market will also require more skilled technical work, of the kind provided by construction workers, engineers, electricians, and lineworkers. In the US alone, Tylenda says, roughly 500,000 net new jobs will need to be filled to satisfy the growing demand for power by 2030.
These trends are already playing out in the labor market, says Briggs. Relative to trend, the hiring for HVAC contractors, electrical contractors, and other workers to build data centers has risen. Construction jobs exposed to the data center build-out have increased by 216,000 since 2022. “And we expect that data center investment will continue to grow,” he says.
Beyond the infrastructure sector, Briggs says, the AI revolution can create three new kinds of jobs. There will be an increase in demand for workers with AI knowledge and associated skills. AI will also create new, specialized occupations—in, for example, fields like healthcare, where technological advancements in the past have made specialization possible.
And finally, AI can indirectly boost discretionary demand in occupations that emerge because of rising incomes, demand, and worker availability, even if these roles were already technologically feasible. For example, 1 million workers today are employed in pet care, nail salons, educational support/tutoring, and athletic coaching occupations that emerged over the last 30 years.
The outlook for the US labor market
The labor market in the US has been in sharp focus over the past nine months or so, Briggs says, “ever since we started to see job growth slow in the second half of 2025.” There were two shocks that led to this slowdown. The first was uncertainty related to tariffs, which made employers less confident about hiring. The second was the dramatic slowing of immigration into the US, from a fast pace in 2023 and 2024. Goldman Sachs Research expects net immigration to further slow this year.
But Briggs also projects a stabilization of the labor market, driven in part by fiscal tailwinds and other factors that are forecast to lead to a sharp acceleration in GDP growth in the first half of 2026. Unemployment is estimated to inch up to 4.5% this year (from 4.3% in January).
“The big story in 2026 in labor will be AI,” Briggs says. “If we see some job losses pulled forward, that sets stage for potential underperformance relative to our forecast, and that may lead the Federal Reserve to cut rates.” Entry-level workers in their 20s and 30s, coming into the knowledge and content creation sectors, are likely to be most affected by new deployments of AI. “But this is not a foregone conclusion,” Briggs says.
“There’s a lot of uncertainty about how this will play out. It’s important to watch the labor market data in real time to monitor that,” he adds.
