November is the second month that the Bureau of Labor Statistics has failed to produce a jobs report due to the recent government shutdown. What we do know about the economy comes from private sources, and they paint a mixed to negative picture.
Revelio Labs found that the labor market lost 9,000 jobs last month as the government sector and the retail industry in particular continued to shed jobs. In the latter sector, seasonal hiring has been unusually slow as retailers cite concerns about slowing consumer spending and increased costs from tariffs.
In contrast to this, ADP’s employment report found that 42,000 jobs were added in October, with the logistics and healthcare sectors adding sizable gains. This was the first month of positive jobs growth since July and a modest one compared to gains made earlier this year. October also saw over 150,000 job cuts, the most in an October since 2003.
Artificial intelligence (AI) was the top reason for job cuts in October, accounting for a fifth of all staffing reductions. The debate over whether AI is leading to negative outcomes for workers has intensified. The chairman of the Federal Reserve, Jerome Powell, believes that it has shrunk employment opportunities for job seekers. However, economists aren’t so sure. Nevertheless, the types of jobs that are most vulnerable to elimination by way of AI and automation developments tend to employ large numbers of Black workers.
The AI boom has taken the stock market to record highs and ushered in hundreds of billions of dollars in capital expenditures into data centers. The data centers are seen as a necessity in the global AI arms race and are seen by some as a means of economic development for local communities. While touted as investments that will reap transformative future benefits to local economies, they remain controversial for the communities in which they are located or plan to be built.
Sentiments towards data centers can be summarized best by Davante Lewis, a local Louisiana official who voted against a data center power project in the notorious “Cancer Alley” region: “Not all economic development is good economic development.”
Data centers use an enormous amount of electricity, which has meant a 257% increase in electricity prices for communities near data centers since 2020. Additionally, recent research has shown that AI data centers create relatively few permanent jobs. Building what are essentially warehouses of computer servers is a labor-intensive endeavor, employing a thousand or more temporary construction, engineering and logistical positions. Once constructed, they employ a much smaller and more specialized workforce, typically consisting of imported talent rather than existing workers from the local area.
In addition to electricity usage, concerns about high water consumption and increasing levels of air pollution have led to intense pushback from communities. Data centers are typically built in rural areas and more economically disadvantaged communities. In places where economic development is hard to come by, a data center promising 100 jobs is an enticing prospect for a rural town with a declining population. However, in practice, claims about job creation and economic development made by data center builders are frequently overstated.
In addition to little to no tangible economic benefit for impacted communities and higher monthly utility bills, there is a troubling racial component to data center construction as well. Many are built in what is called “the Black Belt” of the country, an area that stretches from Texas to Virginia with large concentrations of Black residents. Historically, Black communities have been treated as zones of extraction for agricultural and industrial operators and have been left with the effects of environmental waste and pollution as a result. Given this ignominious history, some of the stiffest opposition to data center construction has come from Black communities.
Artificial intelligence, the data centers that power AI and the corporations that own and are expanding both are affecting the lives of Americans on all sides of the AI debate. Workers and job seekers have experienced the negative labor impacts of this fast-growing technology. For communities, it could mean another form of resource extraction that benefits shareholders and not locals.
Data center proliferation has not reversed the slowdown in the labor market going into the final months of 2025. With seasonal hiring down and consumer spending decreasing, the chances of a Christmas miracle remain slim.
Joseph Dean is the Jr. Racial Economic Research Specialist with NCRC’s Research team.
Photo credit: Geoffrey Moffett via Upsplash.
