US: AI impact to labor market stays limited – TD Securities

⦿ Executive Snapshot

• What: TD Securities reports that the impact of AI on the US labor market remains limited as of 2026.
• Who: Oscar Munoz, Chief US Macro Strategist at TD Securities.
• Why it matters: Understanding the moderate effects of AI on employment can shape policy and business strategies in the evolving labor market.

⦿ Key Developments

• AI adoption in the US labor market is low, with only 18% of firms utilizing AI technologies.
• The sectors where AI is adopted are primarily large, knowledge-intensive firms, with a narrow scope of AI implementation.
• Recent surveys indicate that both AI-adopting and non-adopting organizations report similar trends in workforce expansion overall.

⦿ Strategic Context

• Historically, technological advancements have disrupted labor markets, but current evidence suggests that AI's influence is currently modest and confined.
• The cyclical nature of employment trends in certain sectors indicates that economic conditions, rather than AI adoption, are primarily driving labor market dynamics.

⦿ Strategic Implications

• The limited impact of AI on employment may alleviate fears of widespread job losses, suggesting a more gradual integration of technology into the workforce.
• Companies may continue to expand their workforces despite AI adoption, leading to a more stable labor market environment in the near term.

⦿ Risks & Constraints

• Potential roadblocks include the slow pace of AI adoption across various industries, which may hinder broader economic benefits.
• Competition among firms in knowledge-intensive sectors could limit the sharing of AI advancements, affecting overall productivity gains.

⦿ Watchlist / Forward Signals

• Future labor market reports and surveys will provide insights into the ongoing effects of AI adoption over the next few years.
• Monitoring sectors with high AI exposure will be critical to understanding any shifts in employment trends as technology continues to evolve.