Job market improves in parts of the country as labor shortages emerge: Beige Book

The labor market appears to be picking up steam in some parts of the country, according to the Federal Reserve’s latest Beige Book.

Across the Federal Reserve’s 12 districts, five reported “modest, moderate, or solid gains in employment” in May and June, up from just one district at that status in the previous reporting period, the Fed said. The rest experienced little to no change, consistent with the “low hire, low fire” narrative that has been dogging the economy.

Still, the more positive changes in some corners of the US track with recent jobs reports that have shown steady payroll gains, an improvement from the doldrums of 2025. The unemployment rate in June also slid to 4.2%.

“Employment rose in a variety of industries, including manufacturing, construction, and retail,” the Fed said. “Skilled workers were difficult to find in a range of fields, notably technicians and tradespeople.”

On the bullish side for labor, New York saw “modest” improvements in the job market. According to the Beige Book, “a payroll services firm reported that larger firms started to hire for growth for the first time in a while.”

Things were similarly good in Dallas, where “staffing firms cited a broad-based increase in demand across sectors and skill levels, with one contact noting that June was their best month since before the pandemic.”

Labor shortages were also noted in several regions, with a tight supply of electricians reportedly delaying data center projects in the Philadelphia region, while the Federal Reserve Bank of Richmond offered that “multiple firms reported being unable to operate at full capacity due to understaffing” in the region.

Yet over in St. Louis, employment levels barely budged. The situation was similar in Atlanta and Boston.

“Though there were reports of lower employment in a couple of Districts, the declines were small,” the Beige Book said.