{"id":310830,"date":"2025-11-27T19:25:17","date_gmt":"2025-11-27T19:25:17","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/310830\/"},"modified":"2025-11-27T19:25:17","modified_gmt":"2025-11-27T19:25:17","slug":"fed-beige-book-employers-are-leaning-on-ai-freezing-hiring-changing-hours-to-avoid-layoffs","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/310830\/","title":{"rendered":"Fed Beige Book: Employers are leaning on AI, freezing hiring, changing hours to avoid layoffs"},"content":{"rendered":"

If a company wants to reduce its headcount, there are several levers it can pull. It could freeze hiring in order not to grow any further; or when people leave the business, their roles may not be replaced. In 2025, there\u2019s another option: Use AI to replace some of the roles managers would have otherwise recruited for.<\/p>\n

According to the Fed\u2019s latest Beige Book<\/a>, businesses are doing all of the above (and more) to try and avoid announcing mass layoffs. <\/p>\n

The result is that consumers are feeling less optimistic about their career options, without seeing their reality reflected in headlines about major job cuts. According to the Conference Board\u2019s latest Consumer Confidence survey<\/a> out this week, 27.6% of respondents said jobs were \u2018plentiful,\u2019 which was down from 28.6% a month prior. The number of people saying jobs were \u2018hard to get\u2019 stayed relatively flat month to month. <\/p>\n

The Fed\u2019s Beige Book for November<\/a> lays bare the \u201clow-hire, low-fire\u201d economy which Chairman Jerome Powell highlighted months ago. \u201cEmployment declined slightly over the current period,\u201d the report said, with around half of the Federal districts noting weaker labor demand.<\/p>\n

\u201cMore districts reported contacts limiting headcounts using hiring freezes, replacement-only hiring, and attrition than through layoffs,\u201d the Beige Book added. \u201cIn addition, several employers adjusted hours worked to accommodate higher or lower than expected business volume instead of adjusting the number of employees. A few firms noted that artificial intelligence replaced entry-level positions or made existing workers productive enough to curb new hiring.\u201d <\/p>\n

One example from the report was a retailer in the district of St Louis, which reported it had experienced lower sales and, as such, had ordered less inventory to see them through the rest of the year. In order not to axe team members, the business slashed the hours staff were scheduled for. <\/p>\n

Across the board, many districts also noted a pullback in consumer spending. For example, restaurant regulars who used to come in daily are now coming in once or twice a week, and returning customers are trading down on their purchases. <\/p>\n

In tandem, many businesses \u201cindicated that the composition of their workforce remains stable, with no need to raise wages beyond standard cost-of-living adjustments for either new or existing employees. Business leaders broadly expect employment to hold steady and expect hiring to pick up in 2026,\u201d chimed the Federal Reserve Bank of Kansas City. <\/p>\n

Brighter days ahead<\/p>\n

The good news is (particularly for younger workers who have struggled to get into the jobs market) the outlook for 2026 is optimistic. <\/p>\n

With the Fed expected to take a more dovish route next year<\/a>, courtesy of a new chairman, analysts are hoping business activity will ramp up\u2014and with it, the labor market to become more dynamic. <\/p>\n

\u201cAfter cooling gradually in 2025, we expect the labor market will stabilize and show signs of retightening over the course of the year. The unemployment rate should dip to 4.4% after reaching 4.5% this year,\u201d Deutsche Bank\u2019s Matthew Luzzetti\u00a0and his team wrote in the institution\u2019s World Outlook for 2026, released earlier this week. <\/p>\n

\u201cWe expect demand and hiring to firm somewhat alongside growth,\u201d the note added. \u201cBut, in the near term at least, risks remain that the \u2018curious\u2019 equilibrium of low hiring and firing breaks with layoffs picking up in a more sinister way.\u201d<\/p>\n

Indeed, Oxford Economics\u2019s Bob Schwartz argued Friday that September\u2019s better-than-expected jobs report show a\u201dlabor market that had more muscle beneath the surface\u201d than previously believed. <\/p>\n

The much-anticipated jobs report came in with 119,000 roles added and a stable unemployment rate of 4.4, with Schwartz echoing a broader belief that much of the growth has come from spending by high-earners, reinforcing current thinking about the U.S. being in a K-shaped economy. <\/p>\n

Discretionary spending from higher-income households is still doing the \u201cheavy lifting,\u201d he added, \u201cbut with stocks wobbling, that support isn\u2019t guaranteed. In the end, September\u2019s report doesn\u2019t settle the debate\u2014it just underscores how narrow and noisy.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"If a company wants to reduce its headcount, there are several levers it can pull. It could freeze…\n","protected":false},"author":2,"featured_media":310831,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[45,49,48,46,2443,1823,2071,1571,32369],"class_list":{"0":"post-310830","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-business","9":"tag-ca","10":"tag-canada","11":"tag-economy","12":"tag-employment","13":"tag-fed","14":"tag-federal-reserve","15":"tag-labor","16":"tag-u-s-jobs-report"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/310830","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=310830"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/310830\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/310831"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=310830"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=310830"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=310830"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}