BlackRock’s Rieder sees AI driving 6% GDP growth despite hiring slowdown

The US economy just lost jobs for the first time in months, and BlackRock’s top fixed income executive is essentially shrugging it off. Rick Rieder, Global Chief Investment Officer of Fixed Income at the firm managing over $10 trillion in assets, told Bloomberg on August 7 that July’s payroll contraction reflects companies getting more done with fewer people, not an economy running out of steam. Nonfarm payrolls fell by 23,000 in July, a sharp reversal from June’s 57,000 gain, which itself came in well below expectations of roughly 83,000. Rieder called the data “unremarkable.” The productivity revolution thesis Rieder’s argument rests on a structural shift that has been building for years. AI-linked activities have contributed nearly 30% to real US GDP growth over the last three years, according to BlackRock’s analysis. Companies are spending heavily on AI infrastructure, and that spending is showing up in nominal growth figures even as traditional hiring moderates. BlackRock maintains its forecast of roughly 6% nominal GDP growth. The unemployment rate steadied at approximately 4.1%, suggesting the labor market isn’t deteriorating so much as restructuring. This isn’t a new theme ...