Bonds & Rates
Home›Bonds & Rates›Economy›Fed Beige Book says AI buildout is reshaping hiring an…
Fed Beige Book says AI buildout is reshaping hiring and input demand
The Beige Book links AI and data center spending to shortages in electricians and transformer supply, alongside sharp price increases for memory and storage components.
Businesses across the Federal Reserve system are describing how the AI buildout is increasing competition for workers and scarce inputs, and is changing hiring practices, according to the Fed's latest Beige Book, which compiles on-the-ground observations from companies in its 12 districts.
In the Philadelphia Fed's district, a shortage of electricians has delayed data center projects, while Dallas contacts said oilfield services firms are losing skilled workers to power generation and AI infrastructure projects. Businesses also reported tighter supplies or higher demand for materials and equipment used in the buildout, including steel, transformers, electrical components, and power capacity.
A New York technical consulting firm said it saw sharp price increases for memory and storage components tied to elevated demand from data center construction. In employment trends, Kansas City's Fed reported job seekers are finding it increasingly difficult to get past AI application screeners, while several districts said employers are using AI more for screening and productivity.
The anecdotes also suggest a shift in how companies view the economy, with one Philadelphia manufacturer telling the Fed that AI, defense, and data center investment have made the economy more driven by capital expenditures than consumer spending, according to the Beige Book.