Is AI Good For The US Labor Market And Bad For Europe's?

France's unemployment rate has been climbing steadily over the past eighteen months to the highest level in five years, with unemployment increasing across all age groups.

The US, by contrast, has stayed essentially flat and near multi-decade lows over the past few years.

While there are multiple factors driving both country's economic progress (or lack of it), Apollo's Chief Economist, Torsten Slok, recently noted that Europe and the US face the same AI displacement.

But, only the US gets what offsets it:

• the startup formation,

• the CapEx, and

• the hiring that comes from building the technology rather than only absorbing it.

The widening unemployment gap between France and the US is starting to look like the price of being on the wrong side of that asymmetry.

Underestimating AI Disruption?

Slok also points out that consensus earnings expectations still imply remarkably little disruption from AI.

Of more than 200 publicly traded software and white-collar services companies we track, only 10 are currently expected to experience both revenue and EBITDA declines over the next two years.

That suggests markets may be pricing in the possibility of AI disruption without yet fully incorporating its potential impact on earnings and margins.

Apollo sees that AI pressure as manifesting through three channels:

1. direct replacement, where AI performs the same task at a lower cost;

2. labor displacement, where AI reduces the number of employees, contractors or users supporting a business model; and

3. execution risk, where AI-native competitors innovate faster and take market share.

As adoption accelerates, these are the channels we are watching for signs that AI disruption is beginning to show up in fundamentals.

Read more in Apollo's 2026 Midyear Credit Outlook.