Fed's Schmid says labor market is paused on tariff, AI uncertainty

Oct 6 (Reuters) - Kansas City Federal Reserve Bank President Jeff Schmid said on Monday he believes businesses are delaying hiring to protect their profits during the current period of uncertainty around tariffs, and also because they need to weigh how artificial intelligence may change their need for labor.

"A lot of the structural labor issues that we're kind of seeing in the data right now really are a pause," Schmid said.

"Before they're going to hire that next person, they're going to figure out one, is it aligned to a future job skill I need? And can I delay the timing of that hire so I can get through this kind of gross margin risk that I have, that maybe is tariff-driven or maybe it's just kind of relational with some of their supply chains."