Demand for workers has increased throughout the Atlanta Federal Reserve District in recent weeks, the Federal Reserve reported in the Jan. 14 Beige Book.
Published several times a year, the Beige Book provides assessments of economic conditions in the nation’s 12 Fed districts. Beige Book information is gathered from a network of business sources in each district.
The Atlanta District, home to two states with the nation’s highest jobless rates – Georgia and Mississippi – reported that the reluctance of businesses to hire new workers “was waning somewhat in the face of continued increases in demand.”
The Southern and Central regions of Mississippi belong to the Atlanta district, while Northern Mississippi is included in the St. Louis Fed district.
The Atlanta district added 49,500 net jobs. Job gains were fairly widespread across sectors, though retail contributed the most jobs, according to the Beige Book report. The unemployment rate in the Sixth District declined 0.2 percentage point to 6.4. Mississippi’s unemployment rate fell 0.3 percentage points in November to 7.3. It started 2014 at 7.5 percent, rose to 8 percent in July and declined to 7.6 percent in October, according to the Mississippi Employment Commission.
Georgia’s November jobless rate fell to 7.2 percent from October’s 7.6 percent, Georgia Department of Labor reported.
Throughout the Atlanta district, reports of high turnover rates were more prevalent since the previous report on Dec. 2, 2014, with many firms offering improved benefits, notably health care, as an employee retention device. In addition, the conversion of part-time workers to full-time accelerated as businesses tried to meet increased product demand and boost employee loyalty.
Contacts in the Atlanta district also expressed a slight shift in their assessment of labor cost pressures over the coming year with a growing number of businesses reporting acceleration in compensation budgets for 2015. Some firms conveyed they were increasing starting pay or planning to move above minimum wage in an effort to attract and retain their workforce. Conversely, several employers also reported that where possible, they were holding down base pay and instead adding benefits or performance bonuses.
Businesses in the Atlanta district continued to cite little input cost pressure and limited pricing power, with some notable exceptions in commercial construction, transportation, real estate, and food. The Atlanta Fed’s December survey of business inflation expectations indicated that firms’ year ahead unit cost expectations were essentially unchanged at 1.9 percent.
The St. Louis Fed District, which takes in North Mississippi, reported plans for manufacturing activity remained positive in the most recent reporting period.
Firms in chemicals, aviation, packaging, and light machinery plan to hire new employees and expand operations in the district. In contrast, firms that manufacture furniture and paper reported plans to lay off workers or close facilities. Hiring plans among food manufacturers were mixed.
Plans for activity in the St. Louis district’s service sector have remained positive. Firms in logistics and information technology services reported new hiring and expansion plans.
In contrast, firms in courier, building maintenance, and business support services plan to lay off employees. Reports from firms in healthcare services were mixed.
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