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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: bearshark who wrote (17593)	6/16/1999 2:59:00 PM
From: bearshark	Respond to of 99985

Beige Book on Prices. Just out. Labor Markets, Wages, and Prices Labor markets were extremely tight last month in almost all districts, with no signs of easing in the foreseeable future. Despite the summer influx of student workers, temporary employment firms in many districts have been unable to fill all their job openings. Employers in Cleveland are hiring temporary workers in hopes they will become permanent employees after a short trial period. Richmond, Chicago, and St. Louis note that severe labor supply constraints are hampering employment growth in many sectors. Although labor shortages are reported in almost all sectors, some skilled workers have been in especially short supply and many employers have broadened their searches from local to regional and national levels. Information technology workers, in particular, are very difficult to find. As an employment agent in Northern Virginia put it: "Anyone that can operate a personal computer can get a job." Skilled tradesmen in the construction sector are also extremely scarce, especially in urban areas where the building boom continues. The Minneapolis district reports that builders in Duluth imported 200 trade workers due to the lack of available local workers. Persistently tight labor markets have resulted in many reports of increased wage pressures, especially for some specific industries and skilled occupations. Chicago, St. Louis, and Richmond report upward wage pressures in almost all sectors, while other districts report more scattered wage increases. For example, retailers in the Boston district report a recent increase in the use of higher wages as a recruiting tool, while a large retail chain in New York notes increased wage pressures primarily for entry-level positions. In Dallas, wages have risen for truckers, secretaries, legal assistants, and workers with technical skills. Similarly, wage changes in San Francisco have been generally limited, but increases were noted for some types of workers. Cleveland and Philadelphia report that wage pressures have generally been held in check, but rising benefits costs have become more common. The Kansas City district is an exception, as wage pressures there appear to have eased somewhat from previous surveys. Many districts suggest that employers have continued to be creative in finding and recruiting additional labor. Employers in the Atlanta district, for example, appear to be using more bonuses and incentives as part of total labor compensation, and many companies are using more part-time workers and consultants as well as allowing employees to work at home. Some firms in the Boston district are avoiding higher labor costs for new hires by outsourcing and changing work assignments internally. Prices remain generally subdued, but many districts report pockets of higher prices for some specific sectors and goods. At the retail level, price increases have been marginal and infrequent. Retailers indicate that stiff competition continues to restrain price increases. Dallas, for example, reports that smaller markdowns have resulted in a slight increase in average selling prices and Kansas City notes that retail prices continue to edge up. Chicago suggests there have been a few signs that consumer resistance to price increases has softened somewhat. In contrast, retailers in the New York district report that selling prices and merchandise costs have been flat to slightly down. Prices for manufacturing goods and materials have held steady, with modest increases for a few items, such as cardboard, packaging materials, metals, and ethylene-based petrochemicals. The big exception has been building materials, especially sheetrock, which continues to experience substantial price increases. Housing prices and commercial rental rates have also increased in several districts. Here is the url bog.frb.fed.us