Artificial intelligence could be increasing worker productivity so much that companies slow hiring, top Trump administration economic advisor Kevin Hassett said Monday.
“I think that there have been mixed signals in the job market,” the National Economic Council director said on CNBC’s “Squawk Box,” adding that he has seen “really, really positive signals in the output markets.”
After noting U.S. gross domestic product rose at a strong pace in the second quarter of 2025, Hassett said, “there could be a little bit of, almost, quiet time in the labor market, because firms are finding that AI is making their workers so productive that they don’t necessarily have to hire the new kids out of college and so on.”
He maintained, however, that any AI-induced softness in the market would be temporary.
“Because there’s so much output growth and income growth, that’s the kind of thing that a free market will work out relatively quickly as, you know, new ways to spend money emerge,” Hassett said.
Fears about AI replacing entry-level jobs are hardly new, but they have seldom been expressed by the Trump administration, which has championed the nascent industry and taken steps to expand its development in the U.S.
President Donald Trump has signed multiple executive orders aimed at reducing regulatory barriers and promoting the development of AI infrastructure, including data centers.
David Sacks, Trump’s “czar” for AI and cryptocurrency, said earlier in November that there will be “no federal bailout for AI.” His remark came after OpenAI CFO Sarah Friar said that her startup wants a federal “backstop” to support its infrastructure investments. Friar later walked back that comment.
Hassett’s comments also come as Trump and his allies have tried to refocus their messaging on affordability, after Democratic candidates who homed in on that issue won big in major elections earlier this month.
Hassett said on Monday that overall grocery prices have not come down during Trump’s second term, despite the president’s claims otherwise.
“People still are trying to dig out from the big hole that was dug by the previous administration’s policies,” he said.
The cost of an average monthly grocery haul shot up during the Biden administration and “it’s gone up almost not at all” since Trump returned to the White House, he said.
He added that “purchasing power has gone up.”
“It’s just kind of astonishing to me that the cost problem is somehow being blamed on us,” he said.