AI and the Labor Market: Will Firms Hire, Fire, or Retrain?
![Decorative Image: Engineers programming automated robot during checking the robot coding.](https://libertystreeteconomics.newyorkfed.org/wp-content/uploads/sites/2/2024/08/LSE_2024_artificial-intelligence_hyman_460.jpg?w=920)
The rapid rise in Artificial Intelligence (AI) has the potential to dramatically change the labor market, and indeed possibly even the nature of work itself. However, how firms are adjusting their workforces to accommodate this emerging technology is not yet clear. Our August regional business surveys asked manufacturing and service firms special topical questions about their use of AI, and how it is changing their workforces. Most firms that report expected AI use in the next six months plan to retrain their workforces, with far fewer reporting adjustments to planned headcounts.
New York Fed Surveys: Business Activity in the Region Sees Historic Plunge in April
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Indicators of regional business activity plunged to historic lows in early April, as efforts to slow the spread of the coronavirus kept many people at home and shut down large parts of the regional economy, according to the Federal Reserve Bank of New York’s two business surveys. The headline index for both surveys plummeted to nearly -80, well below any historical precedent including the depths of the Great Recession. About 60 percent of service firms and more than half of manufacturers reported at least a partial shutdown of their operations thus far. Layoffs were widespread, with half of all businesses surveyed reporting lower employment levels in early April.