US Labor Market Stagnates as AI Slows Entry-Level Hiring

Goldman Sachs chief executive David Solomon said this week the Wall Street bank could trim the number of recent graduates and interns it brings on over the next three years as artificial intelligence tools alter how the firm does business. Speaking on Bloomberg’s Odd Lots podcast, Solomon described the shift as modest rather than sweeping, yet the announcement arrives as the broader U.S. labor market shows signs of locking out new entrants while shielding those already employed.

The bank plans to hire between 2,400 and 2,500 interns this year and a similar number of permanent new graduates starting in July, figures roughly in line with pre-pandemic levels but below the more than 3,000 it recruited in 2021. Solomon said the firm’s mix of new talent has already tilted toward engineering roles over the past decade and will continue to evolve “given the power of these tools.” He emphasized that Goldman will “still hire a lot of people out of school,” but acknowledged hiring volumes could “contract a little.”

That prospect adds pressure in an economy already offering limited openings for young workers. Government data and private forecasts show the unemployment rate holding near 4.3 percent, yet job growth has slowed sharply. Last year the economy added an average of just 9,700 positions a month, the weakest pace in years. More than a quarter of unemployed workers in April had been without a job for at least six months, up from less than 20 percent two years earlier. Economists describe the pattern as a “no-hire, no-fire” stalemate in which companies avoid both layoffs and fresh recruitment amid uncertainty over energy costs and policy shifts.

The number of workers voluntarily leaving their jobs fell in April to the lowest level since August 2020, when pandemic restrictions were still widespread. Analysts say the drop reflects caution rather than satisfaction: employees who have positions are holding onto them, while those outside the workforce face longer waits for callbacks. Entry-level applicants, including recent college graduates, are especially exposed because many routine analytical and support tasks are being automated.

Solomon’s remarks underscore how large financial institutions are accelerating that automation. While the bank frames the change as incremental, the cumulative effect across Wall Street and other white-collar sectors could reduce the traditional pipeline that has funneled thousands of young people into well-paying jobs each year. Broader economic headwinds, including higher energy prices linked to geopolitical tensions and the lingering effects of recent tax legislation, have done little to spur hiring that might offset those losses.

Labor-market observers note that prolonged spells of weak job creation tend to leave lasting scars on younger cohorts, delaying wealth-building and career progression. For now, Goldman and its peers continue to recruit, but the direction of travel appears clear: fewer entry points at the bottom of the corporate ladder as technology absorbs more of the work once performed by new arrivals.