Pope Leo XIV holds his weekly general audience at St. Peter’s Square in Vatican City, June 11, 2025.Massimo Valicchia | Nurphoto | Getty ImagesPope Leo warned over the weekend about a “social calamity” that could come from mass unemployment due to the adoption of artificial intelligence technologies. Prediction market traders appear to think that worry isn’t misplaced.In his first encyclical, a document that is a form of teaching by the leader of the Catholic Church, Pope Leo urged the world to regulate AI. He also warned about the effects it may have on the labor market. “The pursuit of greater profits cannot justify choices that systematically sacrifice jobs, because the human person is an end, not a means, and the economic order must remain subordinate to human dignity and the common good,” he wrote. Traders on Kalshi place 60% odds that U.S. unemployment will cross 8% at some point before 2030. They also give a 47% chance it will cross 9% in the same period. A 9% unemployment rate would likely stem from a severe recession or displacement of workers. Not including the Covid-19 recession in 2020, there have only been three economic contractions that have pushed the unemployment rate in the U.S. above 9% since World War II. [embedded content]Kalshi traders think there’s a low chance of a recession in 2026, with odds just at 16%. However, in 2027, they see those odds climbing to 45%. There are no contracts about potential recessions in 2028 or 2029. At the same time, traders think AI is driving layoffs right now. Traders place a 78% chance that AI is the number one reason for job cuts in May, which will be confirmed or denied by data from Challenger, Gray & Christmas.In his first encyclical, Pope Leo wrote that “unemployment is a grave evil.” He acknowledged that any new technology leads to temporary labor displacements — a view supporters of the AI buildout have acknowledged too even while reassuring workers that they project there won’ …
