Jerome Powell, the Federal Reserve Chair, has stated that they are currently investigating the potential impacts of generative artificial intelligence (AI) on productivity, inflation, and the labor market. This comes as significant investments are being made in AI, suggesting a major shift in the future. However, it is still unclear whether AI adoption will lead to the elimination of jobs or the creation of new ones.
Powell also mentioned that central banks may not have direct control over the effects of AI on the job market but that the Federal Reserve is dedicating a substantial amount of time and resources towards understanding and analyzing these potential impacts. The Fed is not currently using generative AI, but they are exploring other forms of AI and may incorporate them in the future.
The International Monetary Fund (IMF) has previously stated that the introduction of AI could significantly impact employment, especially in advanced economies. Approximately 40% of global jobs are at risk of being affected by AI, with 60% of jobs in advanced economies potentially being impacted. This could lead to changes in labor demand, wages, and hiring practices in these countries.
Citi released a report in June highlighting the potential impacts of AI on various industries. Finance jobs were identified as particularly susceptible to automation, with 54% of jobs having a high potential for automation and another 12% having the potential to be augmented by AI. Other industries such as insurance, energy, and capital markets also face a high potential for automation according to this report.