After the Federal Reserve raised the federal interest rate for the tenth time since 2022, and with a looming debt ceiling crisis in Washington, D.C., some experts and executives think a recession is around the corner. Fears are being driven by a number of economic factors, including the collapse of First Republic Bank and mass layoffs in the tech industry, stoking fears that the hot labor market is soon to cool down and a global recession is inevitable. The strength of the labor market has helped keep the economy running for months, and inflation has dropped by four points since last summer, but those factors aren’t reassuring for the likes of Tesla CEO Elon Musk.
At the same time, companies across industries are coalescing around the idea of replacing some workers with artificial intelligence (AI) tools, which could further harm the economy and accelerate labor losses. However, Sundar Pichai, CEO of Alphabet and Google, has raised concerns about the harm AI could cause if it’s improperly deployed. Still, the technology might be moving faster than any business or industry is prepared for. And if companies rush into trading human workers with AI-based alternatives, it could escalate a rise in unemployment and usher in a recession many experts believe to be unavoidable.