S P 500 Soars As Jobs Dip Is AI Responsible

Last week, Scott Tirrett, Founder of Venture for Canada, posted an intriguing graphic on LinkedIn that has sparked considerable debate. The chart illustrates a fascinating two-decade trend where the value of the S&P 500 and the growth of US job openings moved in near-perfect harmony. However, around the time OpenAI launched ChatGPT, a stark divergence occurred. The S&P 500's growth trajectory shot upward, while job openings began a significant decline.

This correlation has led many to point the finger at AI as the primary driver behind the shrinking job market. To explore this complex issue, we gathered insights from a panel of experts, including CRM co-founder Clint Oram and a group of small business thought leaders, to analyze what this graphic truly reveals.

The Great Divergence A Tale of Two Trends

The core of the discussion revolves around the sudden split between two key economic indicators that had been linked for twenty years. The panelists explored a variety of factors that could explain why the stock market is thriving while employment opportunities are dwindling.

Key takeaways from the discussion suggest a multifaceted situation:

• Post-Pandemic Correction: A major theme was the idea of a market "right-sizing" after an unsustainable, stimulus-fueled hiring frenzy during the pandemic.
• Macroeconomic Pressures: Uncertainty from factors like tariffs, inflation, and rising interest rates is causing companies to become more cautious and reduce their workforce.
• The Role of AI: The influence of AI is a central point of debate. Some see it as a direct cause of job reduction, while others view it as a "convenient scapegoat" for layoffs that were happening anyway.
• Market Health: Concerns were raised about the S&P 500's growth, with some experts suggesting it might be a "bubbly" situation fueled by interconnected deals between large corporations rather than broad economic health.

Is AI a Convenient Scapegoat

Clint Oram suggests that while AI is certainly having an impact, it's not the whole story. He points to the pandemic era, where stimulus money fueled massive growth and a "war for talent" in the tech sector. "I remember looking at that and going, that is not sustainable," Oram noted, suggesting the current decline is a necessary correction. He believes companies are now using AI as a "convenient scapegoat" for necessary layoffs driven by broader economic uncertainty.

Leland McFarland, CEO of SmallBizTrends.com, agrees, adding that the "hiring frenzy" itself inflated company valuations. He also highlights the "Elon Musk situation" at Twitter, where massive layoffs proved a company could function with a drastically smaller workforce, setting a precedent long before AI was fully capable of replacing those roles.

The Private Equity Perspective AI is the Real Deal

Providing a strong counterpoint, Ramon Ray, CEO of ZoneofGenius.com, argues that the impact of AI is very real and measurable. Drawing from his experience at a private equity conference, he stated, "PE firms don't mess around with their money. They track this stuff." He described how firms are actively monitoring cost savings from implementing "Agentic AI," leading to quantifiable workforce reductions. According to top investors like Robert Smith, "We are seeing cataclysmic transformations in how companies are working." This perspective suggests that AI is legitimately reducing the need for human employees.

Beyond AI Macroeconomics and Market Bubbles

Other experts emphasized looking beyond AI. Shashi Bellamkonda of Info-Tech Research Group pointed to rising Fed rates as a major factor, forcing companies to cut costs to please Wall Street, regardless of AI's involvement. He also noted that most companies still don't trust AI to be fully autonomous, requiring a "human in the loop."

Ivana Taylor, CEO of DIY Marketers, raised concerns about the health of the S&P 500's growth. She compared the current climate to the internet bubble, questioning the sustainability of revenue generated by large tech companies making deals with each other. "Consumer confidence is dropping, people are putting stuff on credit cards... who's gonna buy the stuff?" she asked.

Pierre DeBois of Zimana Analytics cautioned against oversimplifying the chart's correlation. He sees the current trend as an "over-adjustment" by companies correcting for pandemic-era hiring while anticipating the future impact of a still-developing wave of Agentic AI.