Employment continued to rise overall from early July through August. However, the pace of job creation ranged from slight to strong, according to the Federal Reserve Beige Book report released Wednesday.
Demand for workers continued to strengthen, but extensive labor shortages constrained employment and, in many cases, impeded business activity. With persistent and extensive labor shortages, some districts reported an acceleration in wages, and most characterized wage growth as strong — including all of the midwestern and western regions.
“Employers were reported to be using more frequent raises, bonuses, training, and flexible work arrangements to attract and retain workers,” the report stated.
Staffing firms in Boston reported strong performance during the summer months, with quarterly increases as high as 20% following a strong first quarter. Demand for labor remains high across all sectors, and supply is tight. Contacts said clients were lowering their required qualifications and experience for job candidates and offering on-the-job training and opportunities for upward mobility. Pay rates remain elevated, and several contacts reported bidding wars to attract qualified candidates.
Contacts at staffing firms in Philadelphia continued to report better candidate flow and are hoping for greater availability as schools reopen. However, contacts at other firms in the district tended to report a decline in applicants per job since May, citing early retirements, career changes, childcare issues, and enhanced unemployment benefits. In addition, reports of burnout are rising among workers and owners alike.
Meanwhile, staffing firms in the Dallas district reported slightly slower growth, with some contacts pointing to uncertainty caused by the Delta variant as a contributing factor to the deceleration.
Overall, the Beige Book noted economic growth nationwide “downshifted slightly” to a moderate pace as the Covid-19 Delta variant took hold, with the stronger sectors of the economy being manufacturing, transportation, nonfinancial services, and residential real estate.
Source: Elevated pay rates, more perks for workers due to labor shortages: Beige Book
