Artificial intelligence is not the main reason for the recent rise in U.S. productivity, according to Susan M. Collins, President of the Federal Reserve Bank of Boston, and Tom Barkin, President of the Richmond Fed. Both leaders said that while AI is being adopted by businesses and could drive future productivity gains, its current impact is limited.
Collins noted an increase in AI experimentation among businesses but explained that many companies are using AI to support existing work rather than replace employees. “I do think it’s important … to think about how to effectively train and prepare our workforces for the changes that are coming,” Collins said.
The comments were made during a virtual panel at the 2026 Technology-Enabled Disruption Conference: Shaping the Future of Finance and Payments. The event was organized by the Federal Reserve Banks of Boston, Atlanta, and Richmond.
Collins stated that conferences like this help fulfill the Federal Reserve’s mandate to promote maximum sustainable employment and price stability by deepening understanding of labor market trends and productivity shifts. She emphasized the importance of being informed about new technologies such as AI: “(We’re) in relatively early days,” she said. “That really speaks, in my view, to the value … of coming together (and) sharing and deepening our understanding of what the opportunities and challenges are going to be.”
Barkin addressed what he sees as driving recent productivity increases. He attributed much of it to investments in automation made by companies over the past three years due to worker shortages following the COVID-19 pandemic. Companies also changed staffing models and updated operations during this period. “In addition, we’ve got this famously ‘low hire, low fire’ economy,” Barkin said.
He explained that low employee turnover has helped boost productivity because firms slow hiring during uncertain economic times. Barkin added that further productivity gains may come from future AI adoption.
On labor market conditions, Collins described them as “complicated.” She pointed out that revised hiring numbers for 2025 showed only 15,000 jobs added per month on average—lower than earlier estimates. “It’s harder to find a job. … That is real,” she said. “It might reflect uncertainty, (or) it might reflect productivity … enabling firms to meet demand without needing to hire additional workers.”
She called January 2026 jobs data promising due to signs of greater stability but cautioned against relying too heavily on any single statistic or report.
Addressing inflation concerns, Collins indicated it would likely be appropriate for interest rates to remain at their current level for some time: “Again, there are different scenarios that are possible, and it’ll be important to continue to take that really patient, deliberate approach to making (monetary) policy decisions,” she said.
Barkin noted inflation remains above the Federal Reserve’s target rate of 2%. He observed consumers have started resisting higher prices, which has led some companies to reconsider price increases. He also remarked on how public inflation data influences business pricing decisions: “That’s a reference number that’s out there for every pricing decision,” he said. “Until you actually bring the inflation rate down, you’re going to see individual companies feeling like they need to push further.”
The Federal Reserve Bank of Boston supports community revitalization through economic research and outreach efforts as part of its broader mission within the U.S. Federal Reserve System (official website). It works across New England states fostering economic stability through monetary policy formulation—monitoring local conditions—and banking oversight (official website). Susan Collins has served as President and CEO since July 2022 (official website).
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