WASHINGTON (MNI) – The following is third and final section of the
summary of the Beige Book survey of Federal Reserve districts, published
Wednesday:

Employment, Wages, and Prices

Labor market conditions remained soft in most Federal Reserve
Districts. Employment, especially among temporary hiring agencies,
improved in the Richmond District in recent weeks. Modest hiring
increases, often within specific sectors such as advertising in the
Boston District and manufacturing in the Cleveland District, contributed
to modest overall employment gains. Small gains were also noted in the
St. Louis, Minneapolis, and Dallas Districts. The New York,
Philadelphia, and Chicago Districts reported a slowdown in the pace of
hiring activity. A staffing firm in the Chicago District reported a
decline in billable hours.

Wage pressures remained subdued in most Districts and for most
occupations. For the overall labor market, the Philadelphia, Cleveland,
Richmond, Kansas City, Dallas, and San Francisco Districts reported
limited wage pressures. Wage pressures or wage increases were
characterized as modest or moderate by the Atlanta, Chicago,
Minneapolis, and San Francisco Districts. Boston District contacts
reported wage growth between 3 percent and 5 percent in consulting and
advertising. In addition, contacts in the Kansas City District reported
labor shortages and wage pressures in the retail sector and for many
occupations in the high-tech, energy, and transportation sectors, while
the San Francisco District reported continued wage pressures for
specialized information technology workers.

Price pressures seemed to have moderated somewhat, although some
firms reported being able to pass on some rising costs. Overall, input
price pressures appeared to have fallen modestly. Input price increases
remained elevated in the Philadelphia, Chicago, Minneapolis, and Kansas
City Districts. Meanwhile, the Boston, Cleveland, Atlanta, and San
Francisco Districts reported moderation in input price pressures
relative to the previous Beige Book. For the most part, firms ability
to pass on price increases remained mixed. A few Districts reported some
sectors being able to pass on rising prices, such as the retail sector
in the Chicago District and service-sector firms in the Dallas District.

(3 of 3)

** Market News International Washington Bureau: 202-371-2121 **

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