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Beige Book says US economic activity expanding at ‘modest to moderate” pace, labor markets tight

April 19, 2018

Economic activity expanded at a “modest to moderate” pace across the US’ 12 Federal Reserve Districts in March and early April, according to the Federal Reserve Beige Book report released yesterday. Job growth also continued at a “modest to moderate” pace, but businesses in a range of industries reported difficulty finding qualified candidates.

Reports of labor shortages were most often cited in high-skill positions such as engineering, IT and healthcare. Shortages were also seen in construction and transportation.

Businesses increased pay and enhanced training offerings as a result of the labor shortages, according to the Beige Book. They also increased use of automation and overtime. But despite the difficulty finding workers, most Federal Reserve Districts reported wage growth as only modest.

In one note, the Federal Reserve Bank of New York reported that a new law in New York City prohibiting potential employers from asking about a candidate’s salary history has led to candidates demanding higher pay.

One Montana staffing firm noted that labor orders were up but its biggest struggle was lack of candidates, the Federal Reserve Bank of Minneapolis reported in another note.