Since ChatGPT launched, job openings are down 30% while the stock market is up 70%. One economist says the true culprit isn’t AI, but monetary policy

A widely discussed chart illustrating the S&P 500's 70%+ surge against a 30% drop in job openings since late 2022, often attributed to AI, is largely misconstrued. The article posits that the decline in job openings is primarily a consequence of the Federal Reserve's aggressive monetary tightening, alongside trade policies and immigration enforcement, which disproportionately impacted sectors like manufacturing and construction, rather than AI directly. Concurrently, the S&P 500's rally is heavily concentrated in a few AI-related tech giants, responsible for 75% of returns, highlighting a bifurcated economic landscape with a booming AI sector and a more subdued broader economy, raising questions about market breadth and sustainability.

Analysis

The "scariest chart," depicting a 74% S&P 500 surge against a 30% job opening decline since November 2022, is largely misattributed to AI. Job openings fell from 11.5 million (March 2022) to 7.18 million (August 2025), while the S&P 500 climbed from 3,840 to 6,688. This unprecedented divergence from historical JOLTS data signals a complex economic shift.

The job market contraction primarily stems from the Federal Reserve's aggressive monetary tightening, initiated in March 2022, and restrictive trade/immigration policies. Higher rates disproportionately impacted capital-intensive sectors like manufacturing and construction, which saw the largest job opening declines, while the AI-proximate "Information" sector experienced the smallest reduction.

Conversely, the S&P 500's robust performance is heavily concentrated, with AI-related stocks accounting for 75% of returns and 80% of earnings growth since November 2022. The "Magnificent Seven" now comprise over one-third of the index, raising bubble concerns. While AI affects some early-career workers, the BLS projects growth in many AI-exposed occupations.

This reveals a bifurcated economy: a booming AI-driven sector alongside a more subdued "everything-else" economy, influenced by monetary policy and trade dynamics. The sustainability of this concentrated market growth and the broader economic trajectory remain key uncertainties for investors.

Key Decisions for Investors

• Investors should critically assess portfolio concentration in AI-related megacap stocks, given the narrow market rally and rising bubble concerns.
• Closely monitor Federal Reserve monetary policy shifts, particularly the impact of ongoing rate cuts on broader economic sectors.
• Evaluate the nuanced, sector-specific effects of AI and trade policies on long-term labor market dynamics and potential investment opportunities.