St. Louis Fed research finds insufficient job vacancies, not lack of AI skills,
was the main driver of rising unemployment among young U.S. workers. From April
2023 through December last year, unemployment for 18–24-year-olds rose 2.9
percentage points attributable to reduced vacancies; by contrast, employers
shifting to AI-related roles and requiring specialized skills raised
unemployment in that group by 1.1 percentage points. The paper says AI’s effect
is meaningful but the vacancy-shortfall impact is more than twice as large, and
that hiring slowdowns since April 2023 have hit new entrants—particularly recent
college graduates—first, with AI an additional but smaller headwind.
