Moderate rise in US economy, but job shortages spread: Fed

The U.S. economy has continued to expand with only modest price increases, but companies are increasingly complaining of trouble finding workers, including for low-skill jobs, the Federal Reserve said on April 19.

In its periodic report on economic conditions, known as the beige book, the Fed noted fairly widespread optimism in the manufacturing sector, as output continued to gain, tempered with some caution due to issues including uncertainty over Trump administration trade policies.

All of the 12 Federal Reserve districts across the country once again reported continued economic growth since the March survey, "with the pace of expansion equally split between modest and moderate" according to the report, which collects views of economists, business contacts and others across the country.

But amid the growth and rising employment, the striking feature of the report was nearly every district saw increasing signs of labor shortages, which now extend beyond high-skilled technical jobs and are hitting sectors like construction.

"Labor markets remained tight, and employers in most districts had more difficulty filling low-skilled positions, although labor demand was stronger for higher skilled workers," the survey said.

The competition for workers led to anecdotal reports of companies offering higher pay or bonuses, staffing firms declining to work with employers paying less than $11 an hour, and one South Carolina construction firm closing its doors after 25 years.

And although wage increases generally ranged from "modest to moderate," the potential for tight labor markets to push wages higher and spill over into inflation will be a key concern as central bankers review the report ahead of the May 2-3 policy meeting...