(The opinions expressed here are those of the author, a

columnist for Reuters.)

By Mike Dolan

LONDON, Aug 13 (Reuters) - AI is storming through markets,

construction and corporate planning. But its imprint on the

inflation and jobs data the Federal Reserve watches most closely

remains too small and contradictory to move the policy dial - at

least for now.

For most financial markets, it's hard to ignore the AI boom.

Chip stocks around the world have surged and swung wildly this

year. Tech earnings growth has exploded, while so-called AI

hyperscalers have embarked on a corporate borrowing spree and

marshalled hundreds of billions of dollars in financing for the

buildout.

And there's little doubt that policymakers are watching closely

for the long-term transformative effects of AI adoption on

demand for workers, productivity and ultimately the economy's

speed limits. Indeed, one of Fed Chair Kevin Warsh's task forces

on reforming Fed thinking long term focuses on productivity and

jobs and will put the AI revolution under the policy microscope.

But more than halfway through 2026, inflation and labor market

data show only glancing blows - and measurement issues are a

headache.

July's consumer price inflation report this week revealed some

pressure in computer and equipment prices, and there has been a

debate inside the Fed for months about how "software and

accessories" components have spurred core goods inflation in the

Fed's favored personal consumption expenditures (PCE) basket.

Although the methodology is challenged, the PCE index weighting

for software and accessories is 30 times that of the consumer

price index (CPI). Earlier this year, the category accounted for

more than half of the annualised inflation of core goods, which

was running above 5%.

And yet, that software and accessories weighting in the PCE

basket is just 1.2%.

But so-called "chipflation" from a shortage of memory chips in

the AI data-center scramble could spread to other goods

containing chips, as Apple's ( AAPL ) product price hikes last

month highlighted. Then there are bottlenecks in demand for

physical computers and related equipment too.

Economists at Morgan Stanley ( MS ) point out that the July CPI report

indicated that tariff-related goods price rises are topping out,

but this was offset as AI-affected prices began to push goods

categories back up. The AI price push seems to be broadening to

categories other than software and accessories, they added, with

July's CPI showing a pickup in electronics prices and personal

computers and peripherals climbing 3.5% on the month, likely due

to Apple's ( AAPL ) hikes.

Still, the weighting of the "information technology, hardware

and services" segment of the CPI basket is just under 2% -

dwarfed by the mega weightings of housing, shelter and

transportation, and even lower than the apparel segment.

Of course, the wider influence of chip and

information-technology inflation beyond these categories bears

watching. These input costs for businesses, and affected

sections of the producer price index - such as airfares - feed

directly into the PCE calculation.

And yet, it will be a battle for the Fed to disentangle the data

and isolate AI as a single factor.

THE OTHER MANDATE

The bigger monetary policy impact over the horizon lies in the

other part of the Fed's dual mandate - maximum employment.

If, as many fear, AI displaces workers rather than just helping

them, there could be weaker wage growth and household demand,

alongside a productivity lift for businesses down the line. That

would bias Fed policy in the opposite direction if it

materialises.

As with inflation, the effect is noticeable in some hiring and

jobs surveys and data cuts, although clear evidence of its

effect on broader measures of job creation and unemployment is

more difficult to nail down.

Global outplacement firm Challenger, Gray and Christmas said

last Thursday that planned job cuts by U.S.-based employers

dropped 27% to 33,429 in July, the lowest level in two years.

However, it also said layoff plans continue to be announced

primarily in tech. "Artificial intelligence is still the story,

as investments in the technology reshape organizations," said

Andy Challenger in the report.

Of course, AI adoption may be affecting more than the tech

sector itself - insurance and other financial services are

showing falling payrolls, with insurance jobs down more than

80,000 over the past year, according to the latest payrolls

data.

Indeed, Deutsche Bank strategists point out that the Challenger

survey now cites AI as responsible for 30% to 40% of all job

cuts over the last three months when reasons were given.

The Challenger report itself said AI led as the reason for job

cuts - cited in a third of all layoffs announced - and it was

the fifth consecutive month that the technology had been the

leading reason.

Accurate measurement is likely to be a factor here too when it

comes to the hard numbers, but for the Fed this cuts several

ways. AI may be exerting pressure on jobs within an otherwise

more stable picture - certainly judged by a falling unemployment

rate, low jobless claims and brisk hiring in other sectors.

AI will almost certainly have big economic impacts down the

road, but the Warsh task force will likely have to stare into a

crystal ball for clarity rather than rely on existing data.

As for the September policy meeting, the data remains too

unclear to swing the discussion either way.

(The opinions expressed here are those of Mike Dolan, a

columnist for Reuters.)

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