New York Fed analysis links AI use to small businesses’ employment optimism

What the new analysis measures

New York Fed researchers analyzed the 2025 Small Business Credit Survey’s AI module: 5,248 employer firms. The employment expectation index was 33 percentage points among AI users versus 15 among non-users. This subtracts the share expecting fewer employees from the share expecting more over the following twelve months; it is not a hiring rate.

The adjusted gap was 10 percentage points after accounting for firm and owner characteristics, location and past employment changes; that sample contained 4,769 firms. The analysis measures association, not AI-caused growth.

Sources: New York Fed, Liberty Street Economics

The survey predates today’s labor market

Fieldwork ran September 3–November 14, 2025. The SBCS uses a weighted convenience sample, not random selection; selection and noncoverage biases may remain. The full survey’s 6,525 employer responses are a different denominator from the AI module.

Sources: Federal Reserve Banks

Our interpretation: turn optimism into a testable plan

For someone assessing a small employer or planning their own business, we would start with the proposed work. What new service would the business provide? Who would pay for it? Which tasks would still require a person? These questions help make a plan concrete without assuming that confidence will become a vacancy.

Consider our hypothetical example of a repair shop proposing an automated appointment assistant. Write down the expected customer benefit, the work needed to maintain it and the conditions under which another employee would be hired. Keep a separate record of actual bookings and staffing decisions. If the project frees time but demand stays flat, that is a different result from expansion. This is our invented planning exercise, not an example from the survey.

A career portfolio could show how you distinguished an expectation from an observed outcome and revised a plan after collecting evidence. We would find that reasoning useful to discuss with a prospective employer. We are not claiming that the survey predicts which businesses will recruit or which applicants will be selected.