US programmer job growth nearly halved since ChatGPT launched, Fed study finds

2026-04-25 · Source: The Decoder · Field: Finance & Economics — Economic Analysis & Policy, AI Labor Market Impact · Depth: Novice, medium

Summary

A new Federal Reserve Board study indicates that the growth rate for programming-heavy jobs in the US has nearly halved since ChatGPT's launch in November 2022. Before this, these jobs grew at almost 5% annually, significantly outpacing the overall labor market. The study, which analyzed monthly US employment data and Department of Labor occupational classifications, found that growth in sectors like IT services and software development has essentially flatlined. Researchers created a counterfactual employment curve to isolate AI's impact from broader tech sector pressures, revealing a persistent three-percentage-point annual drop in programmer employment. This suggests companies are intentionally reducing their programmer workforce share, leading to a gap of approximately 500,000 jobs that might have existed otherwise, though not necessarily direct job losses. Wages have not shown a clear decline, and job postings for software developers have stabilized since 2024 after a significant drop in 2022-2023.

Key takeaway

For CTOs and VPs of Engineering evaluating workforce planning, recognize that the slowdown in programmer job growth is a persistent trend, even after accounting for broader economic factors. Your hiring strategies should adapt to this new reality, potentially by re-skilling existing teams or re-evaluating the optimal balance of in-house versus AI-augmented development. This shift suggests a need to integrate AI tools into workflows to maintain productivity with a potentially smaller, more efficient programming workforce.

Key insights

Generative AI's emergence correlates with a significant slowdown in US programmer job growth, not necessarily job losses.

Principles

• AI's impact on employment manifests in growth rates before wages.
• Industry-wide factors must be controlled to isolate AI's effects.
• Contract development is a major employer of programmers.

Method

Researchers used a counterfactual employment curve, comparing actual programmer employment to a scenario where their share within industries remained constant, thereby isolating AI's impact from broader economic shifts.

In practice

• Monitor job growth rates in programming-heavy sectors.
• Analyze occupational data for skill requirement shifts.
• Consider AI's delayed impact on hiring decisions.

Topics

• Programmer Employment
• Generative AI Impact
• ChatGPT
• Federal Reserve Study
• IT Services Sector

Best for: Investor, CTO, VP of Engineering/Data, Policy Maker, Director of AI/ML, Consultant

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Editorial summary, takeaway, and curation by AIssential. Original article published by The Decoder.