RBA's Hunter says AI has yet to lift productivity or cost jobs

what happened

Reserve Bank of Australia Assistant Governor Sarah Hunter said on Monday that there is little evidence so far of artificial intelligence meaningfully raising productivity or causing widespread job losses, Reuters reported. Speaking at a UBS conference in Sydney, she warned that AI could nonetheless create growing risks to financial stability.

Hunter said AI investment would initially add to inflation pressure, because the economy is operating at capacity. Over time, however, supply should catch up with demand as data centre capacity expands and productivity improves, and that pressure should fade.

She pointed to early signs of change in the labour market: fewer job postings and weaker employment in occupations most exposed to AI, alongside stronger growth in less affected areas, particularly for younger workers.

why it matters

Data centre construction has been one reason the RBA raised rates five times this year, to 4.85%, an 18-year high. The speech suggests the central bank currently views AI mainly through its inflation channel, while financial stability risks, including sharp asset repricing if AI returns fall short, are a second concern.

market impact

AUD/USD and Australian bond yields: AI's inflation outlook may shape RBA rate expectations

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