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Discussion Paper
Are Businesses Absorbing the Tariffs or Passing Them On to Their Customers?
U.S. import tariffs increased to historically high rates in recent months, raising the costs of many imported inputs businesses use. Businesses subject to these higher costs have been faced with difficult and complex decisions about whether to absorb the tariffs through lower profits, raise their prices to recover the higher costs, or some combination of both. These decisions are influenced by the degree of competition in the marketplace, potential customer reactions, and the ability to maintain profit margins, among other factors. Our May survey of businesses in the New York–Northern New ...
Discussion Paper
Are Businesses Scaling Back Hiring Due to AI?
The swift advancement of artificial intelligence (AI) has sparked significant concern that this new technology will replace jobs and stifle hiring. To explore the effects of AI on employment, our August regional business surveys asked firms about their adoption of AI and if they had made any corresponding adjustments to their workforces. Businesses reported a notable increase in AI use over the past year, yet very few firms reported AI-induced layoffs. Indeed, for those already employed, our results indicate AI is more likely to result in retraining than job loss, similar to our findings from ...
Discussion Paper
What’s Driving Rising Business Costs?
After a period of moderating cost increases, businesses faced mounting cost pressures in 2025. While tariffs played a role in driving up the costs of many inputs—especially among manufacturers—they represent only part of the story. Indeed, firms grappled with substantial cost increases across many categories in the past year. This post is the first in a three-part series analyzing cost and price dynamics among businesses in the New York-Northern New Jersey region based on data collected through our regional business surveys. Firms reported that the sharpest cost increases over the past ...
Discussion Paper
Are Rising Employee Health Insurance Costs Dampening Wage Growth?
Employer-sponsored health insurance represents a substantial component of total compensation paid by firms to many workers in the United States. Such costs have climbed by close to 20 percent over the past five years. Indeed, the average annual premium for employer-sponsored family health insurance coverage was about $27,000 in 2025—roughly equivalent to the wage of a full-time worker paid $15 per hour. Our February regional business surveys asked firms whether their wage setting decisions were influenced by the rising cost of employee health insurance. As we showed in our companion post, ...
Discussion Paper
Firms’ Inflation Expectations Return to 2024 Levels
Businesses experienced substantial cost pressures in 2025 as the cost of insurance and utilities rose sharply, while an increase in tariffs contributed to rising goods and materials costs. This post examines how firms in the New York-Northern New Jersey region adjusted their prices in response to these cost pressures and describes their expectations for future price increases and inflation. Survey results show an acceleration in firms’ price increases in 2025, with an especially sharp increase in the manufacturing sector. While both cost and price increases intensified last year, our ...