Economic activity in the US increased slightly since late May, according to the Federal Reserve Beige Book report released Wednesday. Five Federal Reserve districts reported slight or modest growth in economic activity, five reported no change and two reported slight and modest declines. Labor demand also remained healthy, though some businesses contacted for the report said hiring was getting more targeted and selective. Employee turnover rates — which had been unusually high in recent years — appear to be returning to pre-pandemic levels.

Still, employers continued to have difficulty finding workers, particularly employers in the healthcare, transportation and hospitality industries as well as high-skilled positions in general.

However, the New York Federal Reserve district noted the use of temporary workers has declined in some areas.

“While hiring plans remained solid, a few employers pointed to scattered signs of easing in labor demand,” the New York district reported in the Beige Book. “Contacts reported that the use of temporary workers has declined noticeably.”

And the Minneapolis Federal Reserve district noted that labor demand remained high because of normal seasonal increases, but one staffing firm in the district cited desire for “full-time help” as causing a reduction in demand for contingent workers.

“A North Dakota staffing firm noted that demand for contingent work had fallen because ‘most clients just want full-time help,’ and available workers preferred full-time jobs to temporary work,” the Minneapolis district said in the Beige Book report. “Counter-intuitively, he said, ‘if the economy softens, we expect demand for temp staffing assignments to increase.’”

In the San Francisco Federal Reserve district, businesses reported hiring for permanent, full-time positions was easier than for contract-based or part-time roles. Layoffs continued in the financial services and technology sectors, albeit at a slower pace.

Artificial intelligence was also mentioned in the Beige Book. Some businesses contacted in the St. Louis Federal Reserve district reported using technology to deal with labor shortages. For example, a company in Little Rock, Arkansas, has begun looking into how AI can help with paperwork and offset persistent labor shortages.