The New York Federal Reserve just dropped the most useful AI-in-the-workplace dataset we’ve seen all year, and the takeaway isn’t what the doomers want you to think. According to the Fed’s August 2026 Regional Business Surveys, published September 1st on Liberty Street Economics, AI adoption among businesses has more than doubled in two years, and layoffs are almost nowhere to be found.
This isn’t a think piece or a VC pitch deck. This is the actual Federal Reserve, surveying real businesses in New York and Northern New Jersey, asking them hard questions about what AI is actually doing to their operations, headcount, and hiring plans.
What This Actually Means
Here’s the headline: 61 percent of service-sector businesses now use AI as part of their regular operations. That’s up from 40 percent just one year ago and 25 percent in 2024. Manufacturers aren’t far behind, with 51 percent now using AI, more than triple the 16 percent recorded two years ago.
But here’s the part the headlines bury: the actual usage within those businesses is still shallow. The median share of workers using AI inside an AI-adopting company is just 17 percent for service firms and 7 percent for manufacturers. Three-quarters of service firms and more than 90 percent of manufacturers describe their AI investments as “minimal to modest,” meaning they’re mostly using free tools or spending a small fraction of their budget. Only 5 percent of service firms call AI a “major strategic investment.”
Translation: most companies have opened the door to AI but haven’t walked through it yet. They’re experimenting. Which means the window to get ahead of the curve is still wide open for smaller, faster-moving operators.
The Numbers Behind It
The workforce numbers are the real story. Of all service firms currently using AI:
- Only 4 percent reported laying off workers because of AI over the past six months.
- About 15 percent said they hired fewer workers than they otherwise would have.
- A nearly equal 13 percent said they actually hired more workers to help them use AI.
- More than a third said they retrained existing staff in response to AI adoption.
Zero manufacturers reported AI-related layoffs. That’s not a typo.
This aligns with what we’ve been tracking here: Gallup’s data earlier this year showed AI adoption jumping 6 points across the board, and Gartner flagged that companies rushing to cut headcount with AI are going to regret it by 2029. The Fed data now adds another data point to the same picture: AI is reshaping how work happens, not eliminating it wholesale.
As for why some businesses still aren’t adopting? About half of non-adopters said their type of work doesn’t lend itself to AI. A quarter said AI isn’t good enough yet. Roughly a third flagged concerns about data privacy and security. Another third said they lack the technical skills to use it effectively.
The Hustler’s Library Take
The narrative that “AI will take your job” is more useful as a fear headline than as a business strategy. What the NY Fed data actually shows is that most AI adoption right now is incremental, cautious, and concentrated in a small slice of the workforce. The mass displacement wave hasn’t materialized, and where AI is being added, companies are hiring people to run it.
That’s a signal, not a comfort. If you’re a small business owner or a side hustler and you’re still waiting for AI to “feel ready,” you’re not racing ahead of a wave, you’re falling behind a slow tide. The gap between the 61 percent who’ve opened the door and the 5 percent who are treating AI as a strategic investment is where the opportunity sits right now.
The fact that retraining is the most common workforce response to AI adoption, more common than layoffs by a factor of ten, tells you what smart operators are actually doing: they’re upgrading their people, not replacing them. Tools like Claude for Small Business exist precisely to make that upgrade accessible for teams that don’t have a dedicated AI department.
What You Should Do
If you’re in the 39 percent of service businesses that haven’t adopted AI yet, the first move isn’t hiring a consultant or buying an enterprise platform. The data says most businesses are starting small, and that’s fine. Here’s where to start:
- Pick one task that eats your time every week. Writing, research, customer responses, scheduling. One task. Find the AI tool that handles it best and use it for 30 days.
- Retrain before you replace. The Fed data is clear: the most common workforce move is teaching your existing people how to use AI, not swapping them out. Your team knows your business. Give them the tools to move faster.
- Don’t mistake low usage for no opportunity. If only 17 percent of workers at the average AI-adopting company are actually using it, there is massive untapped upside inside businesses that think they’ve already “done AI.”
- Watch the privacy concern. A third of non-adopters cited data security as their barrier. If you handle client data or sensitive financials, this is worth addressing head-on before you start feeding information into any AI platform.
The Fed surveys businesses in one of the most business-dense regions in the country. What they’re finding is a cautious, incremental adoption curve with almost no dramatic workforce disruption, yet. But the trajectory from 25 percent in 2024 to 61 percent in 2026 is steep. The businesses building that muscle now will have a two-year head start on the ones still waiting for a sign.
Want to stay ahead of what’s actually moving in business? Join Hustler’s Library for free and we’ll send the plays that matter straight to you.
Source: Liberty Street Economics, Federal Reserve Bank of New York (September 1, 2026). External authority data via the Bureau of Labor Statistics.
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