According to the Fed's Beige Book, the Labor Market is expected to soften broadly this fall, with contacts nationwide indicating flat to moderate employment growth. Employers reported that more candidates were available for their open positions, meaning that workers were still eager to accept jobs. Retention has also improved following record highs for specific labor turnover metrics during the post-pandemic recovery. According to the Boston Fed, hiring activity and hiring plans were dialed back noticeably in some sectors. Labor shortages persisted despite the low unemployment rate and employers' net job growth.
What Is the Beige Book?
The Beige Book is a report produced and published by the Federal Reserve. The report, formally known as the Summary of Commentary on Current Economic Conditions, provides a qualitative analysis of the state of the economy. It is released eight times yearly before meetings as one of its most important resources when making economic decisions.
Federal Open Market Committee Overview
The Federal Open Market Committee, consisting of twelve people, convenes eight times annually to discuss potential modifications to short-term monetary policy. If a vote alters the current events, the country's government securities would be bought or sold on the open market to maintain the economy's steady growth.
Fed's Final Beige Book Report
While the need for labor continued to decline in October and the first two weeks of November, according to the Federal Reserve's final Beige Book report of the year, some employers nationwide still have trouble finding employees with the required advanced skills.
According to a survey of local businesses in the 12 essential banking districts, there is still a favorable job market for job seekers.
Fed's Synopsis
- Most districts report flat to modest increases in overall employment, indicating a slowing demand for labor.
- More job seekers are available, and retention rates have increased in several districts.
- There were reports of layoffs or attrition leading to headcount reductions, and some employers felt at ease firing underwhelming employees.
- Certain districts reported tight labor markets, especially concerning skilled labor.
- In most districts, wage pressure eased, and there were reports of starting wage declines, but overall wage growth remained modest to moderate.
- Some districts reported difficulties hiring and retaining high performers and workers with specialized skills, while other regions noted difficulties in finding skilled labor.
Examples From Specific Districts
- New York: Regional businesses reported that the inability to find workers with the right skills was hindering hiring plans.
- Cleveland: Some bankers and manufacturers increased pay to attract and retain skilled workers.
- Richmond: Trucking firms found drivers more readily available but struggled to hire skilled mechanics. A staffing firm noted the demand for highly skilled workers.
- Chicago: Manufacturers faced difficulty finding workers, especially higher-skilled ones, but there were signs of the labor market cooling.
- St. Louis: Availability of skilled workers remained a top issue for some, while others reported a more stable labor force.
- Kansas City: Renewable energy expansion faced challenges due to skilled labor shortages and limitations on interregional electricity transmission.
Even though the labor market appears to be improving in certain areas, there is still a severe scarcity of qualified labor in many places, with all these factors being considered.
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