A top economic advisor to former President Donald Trump has linked the current slowdown in the labor market to the rapid rise of artificial intelligence. Kevin Hassett, who served as director of the National Economic Council during the Trump administration, told CNBC’s "Squawk Box" that AI is driving a "quiet time" in hiring, as companies find that existing workers are becoming significantly more productive with the help of AI tools. Hassett explained that businesses are now less inclined to hire new employees—particularly recent college graduates—because AI is enabling current staff to do more with less. "There could be a little bit of, almost, quiet time in the labor market," he said, adding that this trend is not necessarily a sign of economic weakness, but rather a shift driven by technological efficiency. Despite the short-term hiring freeze, Hassett remains optimistic about the long-term impact of AI on employment. He believes that the surge in output and income growth fueled by AI will eventually lead to new job creation, as markets adapt and new ways to spend money emerge. "Because there's so much output growth and income growth, that's the kind of thing that a free market will work out relatively quickly," he said. This view is supported by a recent study from researchers at Stanford University, which found that AI is already displacing entry-level software developers. The analysis projects a nearly 20% decline in employment for 22- to 25-year-old coders by July 2025, compared to the peak hiring levels seen in late 2022. The Trump administration has been a strong proponent of AI development, signing multiple executive orders to reduce regulatory barriers and expand infrastructure. One of the most notable initiatives is the $500 billion Stargate Project, aimed at accelerating the growth of data centers to support AI computing needs. On the ground, recent labor data reflects a broader trend of reduced hiring. The Bureau of Labor Statistics reported that in August, employers added just 22,000 nonfarm jobs—far below the 80,000 expected by economists. The unemployment rate rose to 4.3%, the highest since October 2021, when the economy was still recovering from the pandemic. Since the government shutdown, no new job data has been released. However, major companies have continued to announce significant workforce reductions. In October alone, Amazon announced plans to cut about 14,000 corporate jobs, while Target said it would eliminate 1,000 white-collar positions, citing the need to eliminate "overlapping work." The White House has not yet responded to a request for comment on Hassett’s remarks.