Deflationary spiral if AI sparks unemployment and only benefits a small elite
8 hours ago
- #AI
- #Unemployment
- #Deflation
- Citi warns that AI adoption could lead to higher unemployment and deflation in the US.
- Deflation, where prices fall, is harder to solve than inflation and has historically occurred during economic crises like the Great Depression.
- AI productivity gains might benefit only a 'small AI elite,' leading to uneven income distribution and reduced consumer spending.
- Recent job market trends show stalled hiring and rising layoffs, despite steady unemployment rates.
- Consumer inflation cooled to 2.4% in January, while wholesale inflation was higher at 2.9%.