Companies hiking wages amid shortage of truck drivers, carpenters
KPMG chief economist Constance Hunter and Independent Women’s Forum senior policy analyst Patrice Lee Onwuka on the Federal Reserve Bank of Kansas City’s report that manufacturing in the U.S. is soaring and how the strength of the economy will impact the midterm elections.
Employers continue to report a tough time finding qualified workers in a wide range of specialized occupations, according to the Federal Reserve’s survey of businesses.
In its monthly Beige Book, the Fed said companies have faced a shortage of truck drivers, carpenters, electricians, painters and other trades. Many employers responded in the last month by raising wages and improving their overall compensation packages.
Businesses in some of the Fed’s 12 districts expect employment and wage gains in the coming months.
The Beige Book, a collection of anecdotal reports from businesses, said employment rose at a modest to moderate rate across most districts, while the Dallas region saw solid and widespread growth. The labor market remained tight with U.S. unemployment at 3.9%, although wage increases remained modest overall.
The Fed also noted that businesses in most districts are concerned that trade policies will be a headwind, saying prices for steel and aluminum climbed following President Donald Trump’s decision to impose tariffs. Businesses also saw the cost of oil, lumber and cement increase.
Despite uncertainty over trade, the outlook for near-term economic growth was still upbeat, the Fed said.
Investors are closely watching the Fed heading into the central bank’s June meeting, when policy makers are expected to raise interest rates for the second time this year.