Fed Data Debunks AI-Driven Job Crisis for Gen Z

Between April 2023 and late 2025, the unemployment rate for 18- to 24-year-olds climbed 2.9 percentage points. The St. Louis Fed attributes the majority of this surge to a broad contraction in hiring activity. In contrast, the shift toward AI-integrated roles and the demand for specialized technical skills accounted for a 1.1-point increase—less than half the impact of the general hiring slump.

Authors of the study noted that while AI introduces a distinct headwind at the point of labor market entry, it does not represent the structural catastrophe many observers fear. This analysis aligns with recent findings from the Federal Reserve Bank of New York, which suggests that young workers are being squeezed by a cooling market rather than being systematically replaced by automation.