The Federal Reserve Beige Book report released Wednesday reported economic activity expanded at moderate rates, except for in the New York and Philadelphia Federal Reserve districts. Several districts reported firms had difficulty finding workers.
In the Atlanta district, labor conditions were strained as Covid-19 cases rose and absenteeism slowed activity. “Labor markets continued to remain bifurcated with low turnover and small, steady improvements occurring among higher-skilled positions where most can work remotely, while markets for positions that require in-person work (many of which are low-skilled) were tighter and had higher turnover,” according to the Atlanta district.
The New York district, where economic activity weakened, also reported the labor market has softened. Employment slipped in almost all service industries affected by Covid. One New York employment agency noted hiring activity has been depressed, although this is the slow season. No significant pickup in hiring is expected until spring.
Economic activity also fell modestly in the Philadelphia district and employment declined slightly. The Philadelphia district reported the rise in Covid-19 cases, renewed restrictions and colder weather reduced economic activity. Still, staffing firms in the district reported continuing demand for employees and an ongoing lack of willing and qualified job candidates.
The Chicago district reported elevated employee absenteeism among employees because of Covid-19 cases or exposures and childcare challenges for workers.
Economic activity expanded at a moderate pace in the Dallas district. Hiring was most robust in the manufacturing sector but also picked up in the service sector. Layoffs continued in the energy sector, but the worst has passed, according to the district. Outside of the energy sector, a survey found that just over half of Texas businesses surveyed expect to add to headcounts this year, 38% plan to keep employment levels flat and 10% expect declines.