Fed Warns AI Job Threat: Unemployment May Rise, Says Governor Lisa Cook

Governor Lisa Cook issued a warning on February 24, 2026, in Washington, D.C., about how fast adoption of AI could lead to increased unemployment rates in the U.S. in the near future, particularly in menial office and manual labor jobs. 

The Federal Reserve Governor pointed out the ability of AI to automate processes much faster than humans can adapt, potentially leading to layoffs in the short term, even though the long-term benefits are clear. 

This is occurring at a time when the unemployment rate is 4.2% in early 2026, with AI applications such as chatbots and robots reducing the need for hiring in the tech and manufacturing sectors.

Fed Warns AI Job Threat

Lisa Cook, a prominent Federal Reserve voice on the labor market, pointed out that AI poses a greater threat to unemployment than previous technological changes in her February 24th speech. 

AI is very good at pattern recognition and processing data, which poses a threat of 20-30% unemployment in the U.S., according to studies she cited. 

Jobs in administration, legal aid, and assembly will be affected first, and she forecasts interest rate increases to 5%+ if upskilling does not follow.

Unemployment Rate Rise Fears

But the current unemployment level of 4.2% hides the stealthy reduction by AI – companies employed 15% fewer clerks in 2018 as software replaced them. 

Cook explained the reason behind this: “AI grows without scaling costs, and it doesn’t trigger recessions. 

Also, blue-collar employment will decrease as factories will rely on robots for 40% of their repetitive tasks by 2026.”

Read about 119K Jobs Added While Unemployment Rate Rises. 

Lisa Cook Fed Warning Details

As an economist with MIT ties, Cook broke down how AI increases inequality – talented programmers succeed, but others struggle.

Cook urged the government to provide funding for job training and wages to help with the transition.

Her forecast: If nothing changes, the threat of AI to jobs will become a reality by 2027.

Check the List of Top 10 AI-Proof Jobs.

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