Labor tightness continued to ease across the US, according to the new US Federal Reserve Beige Book report released Oct. 18.
In terms of labor trends, most Federal Reserve districts still reported challenges in recruiting skilled tradespeople. Some districts reported older workers are remaining in the labor force. Wage growth remained modest in most districts, and there were reports of less pushback from candidates on wage offers.
Here is qualitative data from the individual districts:
Employment levels were up slightly in the Boston district, though one manufacturer was in the process of enacting layoffs. Wages were up only marginally. Slight-to-modest improvements in hiring and retention were reported in recent months. The labor market remained tighter than average.
The New York district reported labor conditions remained solid with employment increasing modestly, though retail jobs declined. Overall, the pace of wage growth has been steady. On balance, businesses anticipate only modest increases in headcounts. The district did note that a staffing firm in New York City pointed to a slight softening in conditions in recent weeks.
Labor also continued to grow slightly in the Philadelphia district with one staffing firm reporting that candidates were more willing to accept jobs they may have otherwise turned down in recent months. Separately, wage pressure for skilled trade workers continued as qualified candidates remained scarce.
In the Cleveland district, those contacted for comment for the report cited little employment growth since the previous Beige Book report released Sept. 6. Some manufacturers and auto dealers reported weaker profits and slower demand led them to reduce staffing levels. Wage pressures continued to ease.
Employment grew modestly in the Richmond, Virginia, district with some firms saying it had become more challenging to find frontline workers. Shortages of skilled trade workers were also cited by the district. However, a Beige Book contact at a staffing firm that specializes in placing executive-level marketers reported too many candidates for the number of open roles.
The Atlanta district reported that labor markets continued to soften. Skilled labor in several geographies remained in short supply, particularly in construction. Some contacts in retail, manufacturing and staffing reduced headcount or hours to align with weaker demand. Still, wage growth remained elevated.
In the Chicago district, employment rose moderately and contacts expected similar growth over the next 12 months. Many contacts reported difficulty finding workers, especially workers with higher skills. Some contacts said workers were doing less job hopping and were pushing back less on wage offers.
The labor market in the St. Louis district remained tight and employment has increased slightly. Several industries reported a mismatch of labor — plenty of applicants but few with the correct skills.
While employment grew modestly in the Minneapolis district, contacts overall reported somewhat slower labor demand. And there were fewer job openings, with the exception of healthcare. A northern Minnesota workforce contact noted there were “still plenty of available jobs, but employers were not as desperate as before.”
Labor market conditions in the Kansas City district were unchanged on average over the last month. Manufacturing saw a slight gain in jobs, though contacts indicated those were long-vacant positions rather than growth in the workforce. Wage growth slowed to a moderate pace.
Job growth in the Dallas district remained modest. Still, layoffs were reported by some cargo carriers and high-tech companies. A staffing firm contact noted the labor market is looser than it has been, saying “it’s not a pool, but at least we’ve got some drops on the ground.” Another said baby boomers were staying longer in the workforce because cost-of-living increases have left them without much of a choice but to work. Wage growth continued to normalize. Staffing firms said wage pressure eased over the past six weeks, in part, because firms were pushing back more on hybrid and remote arrangements, and candidates were willing to ease upon wage demands to gain that flexibility.
Labor market tightness eased slightly in the San Francisco district, though employment levels were little changed. Challenges persisted in recruiting highly skilled workers in several sectors, including nonprofits, financial services, hospitality, construction and retail. Some contacts reported hiring freezes in sectors such as business services and technology. Financial services and technology firms also relied on attrition and layoffs to lower head counts. One employer in Northern California noted that employee demands to work from home had eased.