According to Fortune, since ChatGPT launched in November 2022, the S&P 500 has surged more than 70% while job openings have plummeted roughly 30%, creating what some are calling the “scariest chart in the world.” Job openings peaked at 11.5 million in March 2022—the highest level since the Job Openings and Labor Turnover Survey began in 2000—before falling to 7.18 million by August 2025, while the S&P 500 climbed from around 3,840 to approximately 6,688. Economist Derek Thompson argues the primary culprit isn’t artificial intelligence but monetary policy, noting job openings peaked the same month the Federal Reserve began raising interest rates in March 2022. The data shows the largest job opening declines occurred in manufacturing, construction, and energy extraction—sectors heavily affected by tariffs and higher borrowing costs—while the “Information” sector involving AI workers saw the smallest decline. This unprecedented divergence between labor markets and stock performance reveals a more complex economic reality than simple AI displacement narratives suggest.
Table of Contents
The Fed’s Deliberate Cooling Effect
What’s missing from the surface-level analysis is understanding how profoundly Federal Reserve policy has reshaped the employment landscape. When the Fed began its aggressive rate hiking cycle in March 2022—starting with a quarter-percentage-point increase on March 16, 2022, and continuing with 11 increases through July 2023—they were explicitly targeting an overheated labor market. The Fed’s timeline of rate hikes shows a deliberate campaign to cool hiring by making capital more expensive. This isn’t a mysterious market phenomenon—it’s the intended outcome of monetary policy working exactly as designed. Construction job openings falling from 303,000 in July 2025 to 188,000 in August 2025, marking the lowest level in nearly a decade, directly reflects how interest-sensitive sectors respond to tighter money. The Fed’s recent pivot to cutting rates in September 2025 to revive a sluggish labor market confirms this relationship—they’re now trying to undo what they previously accomplished.
The Hidden Labor Market Squeeze
Beyond monetary policy, we’re witnessing a structural transformation of the U.S. labor force that’s receiving insufficient attention. The impact of immigration policies on workforce growth represents a critical constraint that’s fundamentally different from previous economic cycles. When the National Foundation for American Policy estimates that current immigration policies could reduce the U.S. workforce by 15 million people over the next decade, we’re talking about a demographic shock that affects every sector from construction to technology. This isn’t just about fewer workers—it’s about reduced economic dynamism, slower innovation, and constrained growth potential. Combined with tariff policies that raise costs for manufacturers and construction firms, we’re creating a perfect storm where businesses face both higher input costs and scarcer labor simultaneously.
The Dangerous Concentration in AI Stocks
The stock market surge tells another story—one of extreme concentration and potential bubble conditions. When JPMorgan estimates that AI stocks accounted for 75% of S&P 500 returns and 80% of earnings growth since November 2022, and that 30 AI-related companies now represent roughly 44% of the index’s total value, we’re looking at market dynamics that should concern every investor. The so-called Magnificent Seven stocks now account for more than one-third of the S&P 500 index—a level of concentration that exceeds even the dot-com era. This creates systemic risk that extends far beyond tech investors. The $5 trillion in wealth gains for U.S. households sounds impressive until you recognize how concentrated these gains are and how vulnerable they make the broader economy to a tech sector correction.
Where AI Actually Matters for Jobs
The genuine AI employment impact is more nuanced than the dramatic chart suggests. Stanford University research showing a 13% relative employment decline for workers aged 22-25 in AI-exposed occupations reveals a targeted effect—it’s hitting entry-level positions in specific fields rather than causing broad-based job destruction. Meanwhile, the Bureau of Labor Statistics projects many AI-exposed occupations will grow faster than average through 2033, with software developer employment expected to increase 17.9% between 2023 and 2033. This creates a bifurcated reality where AI automates certain entry-level tasks while simultaneously creating demand for higher-skilled AI development and maintenance roles. The unemployment rate among college graduates reaching 5.8% in March 2024—the highest in more than four years—suggests we’re in a transitional period where educational institutions and workforce development programs haven’t yet adapted to the new skill requirements.
The Two-Economy Reality
We’re witnessing the emergence of what might be called a “dual-track economy”—one where capital-intensive, interest-sensitive traditional industries struggle while technology and AI-related sectors experience unprecedented investment and growth. This isn’t sustainable long-term. When construction openings were down nearly 40% year-over-year by October 2024 while AI stocks generated massive returns, we’re creating economic imbalances that could have serious consequences. The sectors experiencing the steepest job declines—manufacturing, construction, and energy extraction—are precisely those that form the foundation of middle-class employment and regional economic stability. If this divergence continues, we risk creating an economy where financial markets become increasingly disconnected from Main Street business conditions, potentially leading to social and political tensions that could eventually destabilize the very markets currently surging.
The Critical Next Phase
The coming months will reveal whether we’re witnessing a sustainable rebalancing or the early stages of a more problematic economic divergence. The Fed’s recent rate cuts suggest policymakers recognize the labor market has cooled sufficiently—perhaps too much. But monetary policy alone can’t address the structural issues of workforce constraints from immigration policies or the cost pressures from trade restrictions. The real test will be whether job growth can recover in interest-sensitive sectors once rates normalize, or whether we’ve entered a new era where technology-driven productivity gains benefit capital owners disproportionately while leaving traditional employment sectors permanently diminished. Understanding these dynamics is crucial for investors, policymakers, and workers navigating what may be the most complex economic transition in decades.
