On balance, US economic activity slowed in the last month and a half, according to the US Federal Reserve Beige Book report released Nov. 29. Labor demand also eased.

Federal Reserve districts reported flat to modest increases in overall employment; more applicants were also available. However, some employers reduced headcount through layoffs or attrition. Some employers now also feel comfortable letting go of low-performing workers, but employers also described labor markets as remaining tight with skilled workers still in short supply.

Wage growth remained modest to moderate in most districts.

Here is qualitative labor data by Federal Reserve district:

Employers in the Boston district dialed back their hiring plans and staffing firms reported layoffs. “Staffing services contacts reported slight increases in labor supply and sustained but modest demand for most roles,” according to the district. “The same contacts said that clients were ‘rightsizing’ their businesses through occasional layoffs and reduced hiring plans. Starting wages actually declined for some positions because of an increased candidate pool, and signing and retention bonuses became less common.”

The New York district reported labor market conditions cooled but generally remained solid. Companies have become more cautious about adding headcount. Tech workers have become easier to find. Wage growth slowed.

Employment grew modestly in the Philadelphia district, with nonmanufacturing firms adding staff and manufacturing firms reporting a slight uptick in employment. A survey of firms in the district found 40% expect to increase employment over the year, 45% expect no change and 16% expect a decrease. The net 24% of firms that hope to hire is the lowest since 2011. Wage inflation continued to subside.

The Cleveland district experienced little growth in employment and wage pressures eased.

The Richmond district noted employment picked up moderately, though some business contacts cited an easing in demand.

Labor markets softened further in the Atlanta district. The pace of hiring slowed, and many employers said they were being more selective when it comes to backfilling roles while letting go of low performers. Reports of worker shortages varied by occupation across the region but were more widespread among South Florida contacts.

The Chicago district was one region where employment rose moderately, and business contacts expect a similar rate of increase over the next 12 months. Wage and benefit costs rose moderately.

Employment also grew modestly in the Minneapolis district, though some sectors saw increased layoffs. Healthcare and finance firms reported strong labor demand.

Employment was unchanged in the St. Louis district and wages have grown slightly. Some hiring contracts reported wage growth has slowed or reverted to prepandemic trends with fewer prospective employees successfully negotiating for higher wages.

Labor conditions were unchanged in the Kansas City district. However, most business contacts expect to increase hiring or maintain the size of their workforces over the next year. They cited expected sales growth, overworked staff and an ongoing need for workers with specific skills. Few businesses laid off workers, though some reduced their headcounts through attrition.

Employment expanded slightly in the Dallas district. Still, the pace of hiring decelerated broadly and some freight carriers, high tech and manufacturing companies reported layoffs. Wage growth remained slightly elevated. Most staffing firms contacted in the district reported continued upward wage pressures, though one contact anticipates an easing in the first half of 2024.

Labor market tightness continued to ease in the San Francisco district. Wage growth moderated across sectors.