This months Beige Book shows a continuation of very slow but positive growth in the economy and in employment and labor markets.
In no way can we consider this to be great news but another report that shows we are going in the right direction.
Reports from the twelve Federal Reserve Districts indicate that the economy continued to improve, on balance, during the reporting period from early/mid-October to mid-November.
Economic activity in the Boston, Cleveland, Atlanta, Dallas, and San Francisco Districts increased at a slight to modest pace, while a somewhat stronger pace of economic activity was seen in New York, Richmond, Chicago, Minneapolis, and Kansas City.
Philadelphia and St. Louis reported business conditions as mixed.
Hiring activity showed some improvement across most Districts, although employers are waiting for clearer signals of expanding business prospects before adding significantly to payrolls. A preference for part-time and temporary workers was reported in the Atlanta and Chicago Districts. Seasonal hiring in retail trade is expected to be higher this year in Chicago and San Francisco than in the previous two years.
Employers in the Boston, Richmond, and Minneapolis Districts reported having difficulty finding skilled workers. Employment agencies in the New York, Richmond, and Chicago Districts reported a moderate increase in new job openings, while staffing firms in Dallas said that hiring activity is strong. Boston staffing contacts noted that labor demand has strengthened, particularly in the information technology, medical, manufacturing, and legal sectors.
Wage pressures remain subdued across Districts. Contacts in Richmond and Kansas City noted that they expect little change in wage pressures during the upcoming months. However, employers in San Francisco reported significant increases in employee benefit costs.
Since the last report, the Ninth District economy grew at a firm pace. Consumer spending, tourism, services, manufacturing, energy, mining and agriculture saw increases. Commercial construction was mixed; residential construction decreased.
Meanwhile, commercial real estate was weak, and residential real estate activity decreased. Labor markets showed some signs of strengthening, but wage increases were generally modest. Overall prices remained relatively level.
Labor markets showed some signs of strengthening. A semiconductor firm recently announced plans to hire 300 more employees in Minnesota as part of a factory expansion. Employment gains were also reported in Great Lakes grain shipping. A representative of a temporary services firm noted that it is becoming more difficult to find talented workers in information technology, skilled trades and health care. In the Upper Peninsula, a manufacturer noted difficulty finding technical and welding workers.
According to the business outlook poll, 34 percent of respondents expect to increase employment at their own firms during 2011, while 8 percent expect decreases. In last year's poll, 14 percent of respondents expected to increase staff, while 45 percent expected to lay off workers. In contrast, a Minnesota wind tower maker laid off 110 workers, and an information management firm will lay off 60 workers. A health insurance company in Fargo was laying off 63 people.