On October 8, 2026, two New York Fed economists published a look at how small employers are using AI and what they expect to happen to hiring and revenue. The headline is easy to misread in both directions, so here is what the data actually says, what it does not, and what it means if you are deciding between hiring and automating.
What the Survey Found
The analysis, by Will Aarons and Asani Sarkar of the New York Fed's Research and Statistics Group, is published on Liberty Street Economics. It uses the 2025 Small Business Credit Survey (fielded September to November 2025), with an AI module covering 5,248 employer firms.
- 46% of firms with at least one employee said their business or employees use AI tools; another 15% plan to adopt within twelve months.
- Among users, 63% called AI somewhat or very important to production, and 51% had integrated it partially or fully into business processes.
- Only 31% of users reported increased sales from AI, and 77% reported no change in labor costs.
The Hiring Finding
Measured as the share expecting headcount to rise minus the share expecting it to fall, AI users scored +33 points and non-users +15, an 18-point gap. The gap shrinks as the authors add controls: 13 points with firm and owner characteristics, and 10 points once past employment change is included. On revenue expectations the raw gap was 27 points (+48 vs. +21), falling to 14 points with controls.
The gap was larger among owners who described their finances as fair or poor (21 points on employment) than among those in good shape (10 points).
What This Does Not Show
The authors are explicit: these are associations, not causes, and they measure expectations, not results. They write that whether AI-adopting firms actually see the stronger revenue and employment outcomes they anticipate is a subject for future research. They also say the findings do not point to broad-based optimism about expansion through hiring. The sample covers employer firms only, and the article does not break out which AI applications firms use, so nothing here tells us how call answering or lead follow-up specifically performs.
Two numbers cut against a simple "AI pays off" story: fewer than a third of users reported higher sales, and most saw no labor-cost change. Optimistic owners may simply be both more likely to try AI and more likely to expect growth.
What It Means for the Hire-or-Automate Decision
The fair reading is modest. In this dataset, small firms using AI are not signaling that they plan to cut staff; they lean slightly more toward adding it. That fits how we frame the choice in AI vs. hiring an office manager: automation takes repeatable work (answering the phone, texting back missed callers, scheduling, follow-up) off the people you have, so their time goes to judgment work. It is not evidence that AI will raise your sales or lower your payroll. Plan on measuring your own missed calls and response times first.
Not sure where your leaks are? Run the free missed-call and Google check and we will tell you honestly what is worth automating.
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