Employment continued to decrease nationwide amid the Covid-19 pandemic as social distancing and business closures affected employment at many firms, according to the US Federal Reserve Beige Book report released Wednesday.

But despite unprecedented unemployment rates, contacts cited challenges in bringing employees back to work, including workers’ health concerns, limited access to childcare, and generous unemployment insurance benefits.

The Beige Book, a collection of observations from the 12 federal regional banks, provides a snapshot of current economic conditions; this report is based on information collected on or before May 18. It found economic activity declined in all US Federal Reserve Bank districts – falling sharply in most – reflecting disruptions associated with the Covid-19 pandemic.

Many businesses limited or avoided layoffs with the help of Paycheck Protection Program loans that Congress approved under the Coronavirus Aid, Relief and Economic Security Act, although employment continued to fall sharply in retail and in the “leisure and hospitality” sectors.

Overall wage pressures were mixed as some firms cut wages while others implemented temporary wage increases for essential staff or to compete with unemployment insurance. Most districts noted wage increases in high-demand and essential sectors, while wages were flat or declining in other sectors.

Insights from specific districts included:

Boston: While overall bookings declined, staffing contacts in the Boston district reported that hiring employers were generally offering increased pay to candidates — as much as 25% to 30% higher than before the pandemic — but they expect these higher pay rates to be temporary. Overall demand and placement activity at New England staffing firms slowed compared to pre-pandemic levels but did not halt.

Labor supply was mixed. One Boston district staffing firm saw three or four times as many replies to a job posting as before Covid-19; others described supply as volatile. The majority of staffing contacts noted that for some people, unemployment benefits could outweigh a salary, providing less incentive to find a job. Some employers were interviewing and onboarding direct-hires virtually in the past six weeks, a sign that companies were looking beyond the current situation.

Staffing contacts reported finding ways to cope with the challenges brought on by Covid-19, with new business strategies or new salespeople in some cases. All who were eligible for the PPP received funding, which they regarded as vital support; businesses were also lining up other credit lines and resources in the face of uncertainty. The majority of staffing contacts in the Boston district reported no major structural or compensation changes within their organizations due to Covid-19.

Overall, staffing contacts expressed optimism — “excited” as one put it — to facilitate hiring during the upcoming recovery.

Philadelphia: Staffing firms in the Philadelphia district reported that activity decreased by 35% to 50%. One contact observed that over the course of a day, a recruiter might make 40 calls to prior job candidates, speak with four and hire one.

In a weekly survey, just 10% of firms in the district reported that they had recalled furloughed workers. When asked about impediments to recalling workers, 33% of the firms noted fear of infection and 25% noted lack of childcare; overcoming the lure of expanded unemployment benefits was noted by 29% of the firms.

Cleveland: Employment declined in a broad range of sectors as layoffs were widespread and hiring was limited to a handful of firms. Furthermore, only one-third of contacts who reduced staff levels expect to rehire close to the full number of separated staff when their businesses reopen. This expectation suggests employment is unlikely to climb back to pre-pandemic levels quickly after businesses reopen.

On the bright side, one staffing firm reported that his clients were starting to increase hours or bring back workers who were laid off.

Chicago: Total employment fell dramatically over the reporting period, with especially large declines in the retail, leisure and hospitality, and auto industries. That said, many contacts reported little change in employment, and a staffing firm that primarily serves manufacturers said that workers were beginning to return from furloughs.

Minneapolis: Two surveys in May by the Minneapolis Fed found that April employment fell among a significant number of firms, and many expected additional staffing cuts by the end of the month. Although initial unemployment claims have fallen significantly in recent weeks, they remain much higher than normal levels.

However, seasonal hiring has resumed with the gradual lifting of operational restrictions facing some businesses, albeit at a much lower level than normal. A Montana firm that normally hired 4,000 summer employees reported that it expected only about 1,000 this year. Ironically, staffing firms with job orders reported difficulty finding workers.

Dallas: Staffing firms reported no change in bill rates but a drop off in orders, though there were reports of increased demand for workers in healthcare, nursing, logistics and trucking.

Firms that were beginning to call workers back said that fear of infection, lack of childcare and generous unemployment insurance benefits were preventing some workers from returning. A few staffing firms noted difficulty recruiting due to increased unemployment insurance benefits.

The full report is available online.