Employment expanded modestly or moderately across most of the nation in September through mid-October, according to the Federal Reserve’s Beige Book report released Wednesday. Employers nationwide continued to report tight labor markets and difficulties finding qualified workers — including highly skilled engineers, finance and sales professionals, construction and manufacturing workers, IT professionals, and truck drivers.

The Beige Book, a collection of observations from the 12 federal regional banks, provides a snapshot of current economic conditions. 

Many firms surveyed for the report cited high turnover rates and difficulty retaining employees. Some businesses implemented non-wage strategies to recruit and retain workers, such as giving signing bonuses, offering flexible work schedules and increasing vacation allowances.

Wage growth was mostly characterized as modest or moderate, though Dallas reported robust growth. Most businesses expected labor demand to increase modestly in the next six months and looked for modest to moderate wage growth.

Overall, reports from the Federal Reserve Districts suggest economic activity expanded across the US, with the majority of Federal Reserve districts reporting modest to moderate growth. New York and St. Louis indicated slight growth overall, while Dallas reported robust growth driven by strong manufacturing, retail and nonfinancial services activity. On balance, manufacturers reported moderate output growth; however, several districts indicated that firms faced rising materials and shipping costs, uncertainties over the trade environment, and/or difficulties finding qualified workers. Demand for transportation services remained strong. Labor shortages were broadly noted and linked to wage increases and/or constrained growth.

Observations by staffing firms include:

Philadelphia: Staffing firms continued to report demand for new placements but limitations because of a lack of qualified candidates and difficulty retaining employees. Staffing firms also reported that resistance to raising starting wages softened further among their clients after years of holding wages steady.

Richmond: Staffing firms saw stronger demand, particularly for customer service representatives and human resource professionals. Additionally, firms reported a need for more construction workers, engineers, IT professionals, accounting and finance professionals, plant workers, mechanics and truckers. Wage increases remained modest.

Dallas: A staffing services contact voiced concern over an extreme shortage of qualified bilingual candidates, particularly for areas like customer service, call centers, accounting and business development. Also, a staffing firm reported that employers were willing to accept candidates that met only 60% of the qualifications rather than the usual 80% required. Most staffing firms reported surging demand for their services over the reporting period, noting strength in all markets, both geographically and by industry.