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Labor market remains tight, pressures wages: Beige Book

April 18, 2019

Employment continued to increase nationwide in March and early April, according to the Federal Reserve’s Beige Book report released Wednesday. Employment increased across a variety of industries, with increases most highly concentrated in high-skilled jobs. However, labor markets remained tight, restraining the rate of growth.

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

A majority of districts cited shortages of skilled laborers, most commonly in manufacturing and construction. Contacts also reported some difficulties finding qualified workers for technical and professional positions. Many districts reported that firms have offered perks such as bonuses and expanded benefits packages to attract and retain employees.

The tight labor market also led to continued wage pressures, with moderate wage growth in most districts. Wages for both skilled and unskilled positions generally grew at about the same pace as earlier this year.

Overall, reports suggest economic activity expanded at a slight-to-moderate pace. While most districts reported that growth continued at a similar pace as the previous report, a few noted some strengthening. There was little change in the economic outlook, with contacts in reporting districts expecting slight-to-modest growth in the months ahead.

Reports on manufacturing activity were favorable, although contacts in many districts noted trade-related uncertainty.

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