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Employment increased in most of US, but labor markets remain tight: Beige Book

March 07 2019

Employment increased in most of the country in late January and February, according to the Federal Reserve’s Beige Book report released Wednesday. Labor markets remained tight for all skill levels, including notable worker shortages for positions relating to information technology, manufacturing, trucking, restaurants and construction.

The Beige Book, a collection of observations from the 12 federal regional banks, provides a snapshot of current economic conditions.

Contacts reported labor shortages restricted employment growth in some areas. Wages continued to increase for both low- and high-skilled positions nationwide, and most federal regional banks reported moderately higher wages in their areas. In addition, contacts in about half of the districts noted rising non-wage forms of employee compensation, including bonuses, relocation assistance, vacation time and flexible work arrangements.

Overall, reports suggest economic activity continued to expand; 10 districts reported slight-to-moderate growth, while Philadelphia and St. Louis reported flat economic conditions. About half of the districts noted that the government shutdown had led to slower economic activity in some sectors including retail, auto sales, tourism, real estate, restaurants, manufacturing and staffing services.

Manufacturing activity strengthened on balance, but numerous manufacturing contacts conveyed concerns about weakening global demand, higher costs due to tariffs, and ongoing trade policy uncertainty. Activity in the nonfinancial services sector increased at a modest-to-moderate pace in most districts, driven in part by growth in the professional, scientific and technical services subsector.

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