The Federal Reserve Bank of New York dropped a data-rich report on September 1st that should shift how you think about AI and your business. According to the New York Fed’s regional business surveys — published in Liberty Street Economics — more than 60 percent of service firms and about half of all manufacturers in the New York and Northern New Jersey region are now actively using AI as part of their business processes. That’s up from 40 percent and 26 percent, respectively, just one year ago.
And here’s the part the doom-and-gloom crowd keeps getting wrong: layoffs are not the story. The story is transformation.
What This Actually Means
When the Federal Reserve surveys businesses about what they’re actually doing with AI, the answer isn’t mass firing. It’s retraining. It’s hiring people who can use the tools. It’s automating the repetitive parts of jobs so that the humans handling those jobs can move up the value chain.
Only 4 percent of service firms reported laying off workers because of AI over the past six months. Compare that to the 13 percent who said they hired more workers to help leverage AI — roughly equal to the 15 percent who scaled back hiring. The net effect on jobs isn’t a bloodbath; it’s a reshuffling. And reshuffling creates opportunity for anyone paying attention.
If you’re running a side hustle or small business, this is your signal. The companies that are winning with AI right now aren’t replacing their workforce overnight — they’re identifying which tasks can be handed off to tools like ChatGPT, Claude, or industry-specific platforms, and then redirecting human energy toward higher-leverage work. That’s a playbook you can copy whether you’re a solo freelancer or a 10-person shop.
We’ve covered how AI is creating small business jobs, not killing them — this Fed data is the clearest confirmation yet that the narrative around AI and employment has been badly distorted by tech headlines.
The Numbers Behind It
The New York Fed data is worth sitting with:
- 61% of service firms now use AI — up from 25% in 2024, a roughly 2.5x jump in two years
- 51% of manufacturers are now using AI — triple the 16% reported in 2024
- Despite that rapid adoption, 75% of service firms and 90%+ of manufacturers describe their AI investments as “minimal to modest”
- Among AI adopters, the median share of workers actually using AI is just 17% for service firms and 7% for manufacturers
- Only 5% of service firms call AI a “major strategic investment” — the rest are still testing the water
- The #1 workforce response to AI? Retraining employees — not replacing them
The McKinsey Global Institute has estimated that generative AI could add $2.6 to $4.4 trillion in annual value across industries — but the Fed’s survey makes it clear that most businesses are capturing only a sliver of that right now. That gap is your opportunity window.
According to Bankrate, 39% of Americans already have a side hustle as of 2025. The ones who build AI skills now — even basic prompt engineering and workflow automation — are going to be the ones getting the clients, the contracts, and the revenue when everyone else catches up.
It’s also worth noting why businesses haven’t adopted AI yet. The Fed survey found the top barriers weren’t cost — it was that the work “doesn’t lend itself to AI” (about half of non-adopters) and concerns about accuracy, data privacy, and a lack of staff with technical skills. That last one? That’s a gap you can fill. If you have working knowledge of AI tools, you’re already ahead of a meaningful chunk of the market.
We broke down how AI is splitting the workforce in two — this Fed survey puts hard numbers on exactly which side most businesses are currently sitting on (hint: still early adopters). And if you’ve seen the AI side hustle guru economy, you know that the hype is real but so is the actual opportunity — you just have to separate them.
The Hustler’s Library Take
This Fed report is a gift to anyone who was waiting for clarity. The AI adoption curve just went nearly vertical — 61% of service firms is no longer an “early adopter” story, it’s a mainstream story. But the depth of adoption is still shallow. Most businesses are using free tools, keeping it to a small slice of their workforce, and describing it as “modest.”
That tells us we are squarely in the window where individual operators and small businesses can still build real competitive advantages with AI before the rest of the market catches up. In two more years, when the next Fed survey shows 80% adoption, the advantage goes to whoever built the workflows, the habits, and the client base now.
The retraining angle also matters more than most people realize. If you’re a freelancer or solopreneur, retraining yourself in AI tools is your moat. You don’t need a corporate L&D department to tell you what to learn — you just need to start using the tools on real work this week.
What You Should Do
Given what this Fed data actually shows, here are three specific moves worth making right now:
1. Audit your own AI usage honestly. The Fed found the median worker usage rate is 17% even at firms that have adopted AI. If you’re in that category — using it occasionally, not systematically — pick one core task in your business (client emails, content drafts, research, invoicing) and commit to routing it through an AI tool every single time for 30 days. Build the habit before you build the system.
2. Position yourself as the bridge. The biggest barrier to AI adoption in the Fed survey wasn’t cost — it was “lack of staff with the technical skills to use it effectively.” If you can confidently use AI tools and communicate how they work to non-technical owners, you have a sellable skill right now. Freelancers offering AI workflow consulting, content automation, or chatbot setup are landing clients at rates that didn’t exist 18 months ago.
3. Watch for the retraining wave. Firms are retraining workers, not firing them. That means the people in those roles are going to need resources, guides, playbooks, and tools. Content, courses, and communities built around practical AI skill-building for working professionals — not startup founders — are in the early innings of a massive demand curve. Check out what 87 million freelancers by 2027 means for your income strategy to see where this is all heading.
The Federal Reserve just told you the direction of travel. The businesses that act like it are already building their next competitive advantage. The ones that don’t will be playing catch-up in another 12 months.
Source: Liberty Street Economics — Federal Reserve Bank of New York, September 1, 2026. Authority reference: NY Fed Business Leaders Survey.
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