New York Fed Finds Small Businesses Using AI Expect More Hiring and Revenue

In a survey of more than 5,000 employer firms, 46% said they use AI, and most said it has not changed their labor costs.

Researchers Will Aarons and Asani Sarkar at the Federal Reserve Bank of New York published new findings on October 8 on the bank's Liberty Street Economics blog. They analyzed the AI questions in the Federal Reserve Banks' 2025 Small Business Credit Survey, which covered 5,248 U.S. firms with at least one employee.

Adoption is broad: 46% of employer firms said their business or employees use AI tools, and another 15% planned to start within a year. Among AI users, 63% said AI was somewhat or very important to how they produce their goods or services.

So far the payoff shows up more in sales than in savings. 31% of AI users reported higher sales from AI, while 77% said AI had not changed their labor costs.

AI users were also more optimistic about the year ahead, both on adding employees and on revenue, than firms that do not use AI. The gap narrowed but held after the researchers controlled for firm and owner characteristics. The authors caution that these are associations, and whether adopters actually see the stronger results they expect is a question for future research.