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Economic activity up slightly; firms getting less flexible with remote work: Beige Book

March 09, 2023

Economic activity in the US increased slightly in early 2023, according to the US Federal Reserve’s Beige Book report released Wednesday. Six Federal Reserve Districts reported little or no change in economic activity while the other six reported expansion at a modest pace.

The Beige Book also reported labor conditions across the US remained solid despite hiring freezes by some firms and scattered reports of layoffs. The report also noted some firms were becoming less flexible and beginning to reduce remote work options.

Here are select comments from the Beige Book on the labor outlook:

Boston District. Welders, carpenters and mechanics were highly sought by construction employers, according to staffing firm contacts.

New York District. Labor market conditions have remained strong; however, manufacturers reported employment declined for the first time since early in the pandemic. A New York City employment firm attributed some of the recent churn to more workers seeking fully remote or hybrid jobs as many businesses have begun requiring employees to be on site.

Philadelphia District. Contacts — including staffing firms — noted that hiring continued to be easier, with more applicants, lower turnover and less wage pressure. One staffing contact commented that billboards advertising jobs were no longer seen in the area.

Cleveland District. Contacts indicated employment growth will slow further in the coming weeks.

Richmond District. Wage growth was beginning to slow.

Dallas District: The pace of hiring slowed in the service and energy sectors, and employment growth stalled in manufacturing.

San Francisco District. Contacts in the technology, entertainment and transportation sectors mentioned that layoffs have either continued or are being considered as firms seek cost-cutting strategies amid lower demand.