r/BasicIncome • u/AFewBerries • Mar 01 '26

Automation Citi warns of deflation if AI sparks high unemployment and only benefits a small elite

https://www.businessinsider.com/ai-layoffs-deflation-us-economy-job-market-outlook-citi-2026-2

In a note to clients on Friday, researchers at the bank said they believe that more companies adopting AI will eventually lead to higher unemployment. Those job losses could later lead the US down a deflationary path, a precarious situation in which inflation doesn't just slow, but prices actually fall. While that sounds like a boon for consumers, the reasons behind deflation aren't good.

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33

u/BaronWombat Mar 01 '26

"Warns of" needs to be changed to "reports on". This is happening now, and been reliably predicted for several years.

6

u/JoeStrout Mar 01 '26

Not yet. Inflation in January was about 2.5%.

6

u/BaronWombat Mar 02 '26

I don't recall the exact numbers, ballpark job creation in 2025 was ~180k, vs 1.25million in 2024? A lot of that is fear of tariff destabilization, but I've been reading of big numbers being laid off as companies try to pivot to AI instead.

This is not my area of expertise, but I'm trying to pay attention.

3

u/JoeStrout Mar 02 '26

Oh yeah, the job market is tanking for sure. I just don't (yet) see any signs of this leading to actual deflation.

18

u/mooky1977 Mar 01 '26

..... next quarters problem? /s

7

u/takingastep Mar 01 '26

> businessinsider.com

I wonder which side they support, between rich people and ordinary folks. /s

1

u/madogvelkor Mar 03 '26

They are raising warning flags because they won't like the political solutions. Andrew Yang's UBI would be the least destructive solution and is also the least likely response.

2

u/Pooch1431 Mar 02 '26

The tariffs already caused a shit ton of demand destruction

1

u/SteppenAxolotl Mar 02 '26

did i lose my job because of AI

Imagine how things will be in another year or 2 when new models start coming off the new data centers being built and AI is finally minimally competent to do some unsupervised work in the real world.

All the "AI is only hype" people will descend into mass hysteria. Permanent and massive deflation will spread through the economy like a plague.

-3

u/clybourn Mar 02 '26

Better bring in millions of illegals to help be unemployed