You've probably read stories about new college grads having difficulties getting initial jobs. Obviously, there are variations by field. A standard story is that AI is taking those jobs away, i.e., the positions that college grads would otherwise get are being automated away.* There may well be an AI story but it may not be displacement via automation, particularly in the current period.
Yours truly decided to look at macro-level labor market data to see what might be revealed. Specifically, he looked at unemployment, vacancies (job openings), hiring, quits, and firings. Let's take a look in a series of charts with some commentaries. All data are from the U.S. Bureau of Labor Statistics. Shown below are just charts, but yours truly also looked at the underlying numbers. Each chart below has a little commentary towards the upper right corner.
The chart below summarizes what the charts above seem to be saying. If you take a flash photo of the labor market using the unemployment rate, it would say conditions are good - the rate is relative low - although trending in the wrong direction (up). The flash photo is like what you would have seen during the later stages of the recovery from the Great Recession of 2009, but before the boom times just before the pandemic. The vacancy rate is similar in that regard to the unemployment rate. It is consistent with economic conditions as they were in the later stages of the recovery from the Great Recession, but trending in the wrong direction (down). Hiring and firing, in contrast, are similar to the earlier (depressed) stages of the recovery from the Great Recession.
Basically, the vacancy rate now is too high for underlying conditions. But note that the vacancy rate is the most subjective of the labor market measures we have looked at. It is what employers say it is. Is a job really open because the employer has listed it somewhere? There are lots of reasons why employers might want to keep a finger in the labor market even if they really don't have openings. It is easy to cite uncertainties about where the labor market and economy are headed now. Some uncertainties have to do with policy variation over things like tariffs. Some are residues from the pandemic and its aftermath, e.g., supply chain disruptions. Given those uncertainties - will we have Good Times or Hard Times ahead? - an employer might be reluctant to fire employees who might be needed in the future. But it might also be reluctant to hire new people who might turn out to be redundant.
Still, if you list vacancies, presumably you will be getting applications. And those applications could be viewed as standby candidates - you don't actually want to hire them now but you might want to have them in reserve for the future. For that, you need to process the applications, at least to the level of deciding who to call in the future if there is real need. AI is a potential tool for pre-screening. And to the extent it lowers the cost of basic pre-vetting of applicants, you might want to have more of them. So, yes, AI may be replacing some jobs. But its immediate effect on the labor market is to make it easier for employers to process vacancies and thus provide an incentive to maintain more seeming job vacancies than in the past.
At least, that is where yours truly would look for an explanation of why vacancies seem high, given other aspects of today's economy and why - even as unemployment has crept up - vacancies have moved up to match them. A summary of this interpretation can be found below:
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*See, for example, "Something Alarming Is Happening to the Job Market: A new sign that AI is competing with college grads," The Atlantic, April 30, 2025, at:
https://www.theatlantic.com/economy/archive/2025/04/job-market-youth/682641/;
Danielle Kaye, "Job Market Is Getting Tougher for College Graduates: Researchers attributed some of the difficulty finding jobs to larger societal shifts, including the growing use of artificial intelligence," New York Times, June 6, 2025, at:
https://www.nytimes.com/2025/06/06/business/job-market-college-graduates.html.
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