US economic activity expanded modestly on net since August, though conditions varied across industries and geographies, according to the Beige Book report released Wednesday by the Board of Governors of the Federal Reserve System. However, outlooks grew more pessimistic amid growing concerns about weakening demand.
Two districts — New York and St. Louis — cited declines with slowing or weak demand attributed to higher interest rates, inflation and supply disruptions.
Employment continued to rise at a modest to moderate pace.
“Several districts reported a cooling in labor demand, with some noting that businesses were hesitant to add to payrolls amid increased concerns of an economic downturn,” according to the report. “There were also scattered mentions of hiring freezes. Overall labor market conditions remained tight, though half of districts noted some easing of hiring and/or retention difficulties.”
Wage growth remained widespread, though it was easing.
Here are a few select comments from the report by district:
- Boston — “Manufacturers engaged in modest hiring on balance, but one instituted a hiring freeze in anticipation of a 2023 recession.”
- New York — “One upstate New York employment agency noted that hiring activity has remained steady, led by solid demand for tech workers, while the supply of available job candidates has increased somewhat.”
- Philadelphia — “Employment continued to grow slightly. Contacts described a heightened expectation of a recession, and businesses intensified preparations for a downturn: Multiple firms instituted a hiring freeze, others initiated planning for layoffs if business conditions did not improve, and one firm noted broad-based layoffs were already underway.”
- Chicago — One contact in healthcare saw an increase in the supply of nurses in their area as some who had taken temporary travel positions returned home.
- Minneapolis — “Asked about operating challenges, a Minnesota manufacturer commented, ‘If I could check the labor availability box twice, I would.’”