Artificial intelligence adoption is rising among businesses in the Federal Reserve’s New York district, but so far it has not significantly reduced employment, according to a blog post from the New York Fed on Thursday.
“Businesses reported a notable increase in AI use over the past year, yet very few firms reported AI-induced layoffs,” Fed economists wrote, noting that retraining is more common than job loss. “So far, the technology does not point to significant reductions in employment,” they added.
Concerns remain that AI could eventually displace higher-paid professional and managerial roles. Investors are pouring capital into AI technologies amid broader labor market softening, but the Fed noted that the true impact on employment is likely to unfold gradually over time.
Looking ahead, firms anticipate AI could eventually lead to layoffs and slower hiring as integration deepens. The survey found AI use among services firms climbed to 40% in the past year, up from 25%, with nearly half planning to adopt it within six months. In manufacturing, AI adoption rose to 26% of firms from 16% a year earlier, with about a third expecting to implement it in the near term.