Business activity in the southern region of the country expanded at a slower pace in August, according to new data from the Federal Reserve Bank of Dallas (FRBD). Specifically, the 11th Fed district’s manufacturing index slid from 32.3 to 30.9 this month, the weakest reading since May but better than expected and still well above pre-election levels. The headline decline in August was due to production, shipments, hours worked, and capital expenditures all increasing at slower rates, along with a large number of complaints about U.S. trade policy.
The gauge of wages and benefits, though, improved this month, which is not too surprising since two-thirds of business managers said that they are having problems hiring. Mid-skill positions that typically require some college or technical schooling were by far the hardest for manufacturers to fill in August, but many respondents also reported difficulties filling low- and high-skill vacancies. Among the businesses having problems hiring, the most-cited reasons are a lack of applicants, inadequate technical competencies, and compensation disagreements. When asked what they are doing to better recruit and retain talent, 63.4 percent of surveyed managers said that they are increasing wages and benefits. Among these respondents, only 41.4 percent have already started passing on higher labor costs to customers.
Post author: Charles Couch