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Discussion Paper
Firms' Employment and Wage Outlook Going Into 2025
Every November, the Richmond Fed asks businesses a series of questions about their expectations for hiring, wage adjustments, and other employment-related topics. This year, in addition to the usual set of questions, we asked firms if they have reduced the size of their workforce over the past three months and what workforce decisions they would make if business conditions deteriorated in the next six months.Consistent with past results, most responding businesses expect to maintain or increase employee headcount over the next 12 months. However, there were some shifts in responses compared ...
Discussion Paper
AI and the Labor Market: Will Firms Hire, Fire, or Retrain?
The rapid rise in Artificial Intelligence (AI) has the potential to dramatically change the labor market, and indeed possibly even the nature of work itself. However, how firms are adjusting their workforces to accommodate this emerging technology is not yet clear. Our August regional business surveys asked manufacturing and service firms special topical questions about their use of AI, and how it is changing their workforces. Most firms that report expected AI use in the next six months plan to retrain their workforces, with far fewer reporting adjustments to planned headcounts.
Discussion Paper
February Regional Business Surveys Find Widespread Supply Disruptions
Business activity increased in the region’s manufacturing sector in recent weeks but continued to decline in the region’s service sector, continuing a divergent trend seen over the past several months, according to the Federal Reserve Bank of New York’s February regional business surveys. Looking ahead, however, businesses expressed widespread optimism about the near-term outlook, with service firms increasingly confident that the business climate will be better in six months. The surveys also found that supply disruptions were widespread, with manufacturing firms reporting longer ...
Discussion Paper
The Omicron Wave Stalled Growth and Led to High Absenteeism in the Region
Even before the start of the new year, businesses in the tri-state region were hampered by supply disruptions, rising input costs, and difficulty finding adequate staff. On top of these challenges, the Omicron wave dealt another setback to the regional economy. With infections running high, many businesses were forced to deal with a combination of reduced demand from customers and renewed absenteeism among workers. Indeed, our regional business surveys indicate that economic growth stalled in early 2022 as firms continued to struggle to find workers. Moreover, employee absenteeism was ...
Discussion Paper
Fifth District Firms and the Prospect of Higher Input Prices
Since the middle of 2023, firms' year-ahead input price growth expectations have been relatively steady, hovering around 3 percent for manufacturers and between 4 to 5 percent for service providers. However, recent developments in trade and tariff policy have introduced new uncertainty into firms' decision-making. In December, our surveys showed little evidence that this uncertainty had made its way into firms' price or cost growth expectations. Data from our February surveys show a slight uptick in firms' expected growth in the prices they pay their suppliers.In addition to the slight uptick ...
Discussion Paper
Inflation Expectations of Fifth District Firms
In early 2021, inflation in the U.S. began to climb, with the Consumer Price Index (CPI) peaking at 9 percent on a year-over-year basis in 2022. Since then, inflation has come down considerably. In July 2021, we started to monitor the inflation expectations of respondents to our Fifth District business surveys. We saw expectations rise along with inflation and then start to fall.In the most recent April survey, we find that most firms are following inflation. Firms' expectations for CPI growth in the next year and the next five years have increased again to levels similar to October 2023. ...
Discussion Paper
Fifth District Firms Are Optimistic Going Into 2025
Around the start of the new year, the Richmond Fed adds questions to its monthly business surveys to gauge Fifth District firms' expectations for their business and for the U.S. economy in the upcoming year. In the previous two years, firms were cautious in their expectations, with about half of firms optimistic while one in five firms were pessimistic about the coming year. (For previous analyses, follow these links for the 2023 outlook and the 2024 outlook.) This made sense as the past two years experienced residual effects from the COVID-19 pandemic, decades-high inflation, and an ...
Discussion Paper
The Impact of Tariffs on Our Region's Firms
Given recent changes in U.S. tariff policy, we asked Fifth District firms how they expected to be affected by tariff policy in March. At the time, 80 percent of respondent businesses expected to be impacted. In our May surveys, we checked in with firms and found that 72 percent of respondents made business changes in response to tariffs on imports. Firms reported taking a variety of actions. Of the firms that reported making adjustments, most have or plan to increase prices, 47 percent have canceled or delayed capital expenditures, and 41 percent have adjusted hiring plans.
Discussion Paper
Fifth District Employment: Findings From the June Business Surveys
In our June business surveys1, we asked Fifth District firms how their ability to hire workers has changed since last year and what their expectations are for their workforces over the next six months. Firms reported little change in their ability to hire workers compared to this time last year. Moreover, firms that experienced changes in their ability to hire workers, for better or for worse, cited changes in the labor pool — both in size and skills available — as the driving factor. Over the next six months, most firms expect to hold headcount steady. However, the minority of firms ...
Discussion Paper
The Impact of Hurricane Helene on Fifth District Businesses
Hurricane Helene caused significant disruptions across the Fifth District, especially in western North Carolina, upstate and western South Carolina, and Southwest Virginia. More than 200 people died from the storm, utilities and drinking water became unavailable, and people were displaced from their homes. In the storm's aftermath, the Richmond Fed has been actively monitoring and reporting about its impacts, including on the devastation of Hurricane Helene and what we have been learning as business conditions evolve. In our November business surveys, fielded between Oct. 24 and Nov. 20 ...