The anecdotal signs of the hiring slowdown/Shipping cost update/Some earnings comments

Broadly with the Beige Book from yesterday, 8 districts "reported little or no change in economic activity" while three saw modest growth and one reported an outright decline. Consumer spending during the holidays "delivered some seasonal relief" and there was particular strength in leisure travel. Manufacturing remained in a recession while "Districts continued to note that high interest rates were limiting auto sales and real estate deals." On inflation, 6 districts "reported slight or modest price increases, and 2 noted moderate increases." Of note, "Districts also noted that increased consumer price sensitivity had forced retailers to narrow their profit margins and to push back in turn on their suppliers' efforts to raise prices." With wages, half the Districts "had reported slight or modest price increases, and two noted moderate increases. Five Districts also noted that overall price increases had subsided to some degree from the prior period, while three others indicated no significant shift in price pressures."

Here were the notable comments from yesterday's Beige Book on the labor market side of hiring/firing where a slowing trend in the pace of hiring was clearly voiced:

Boston:

"Employment was flat on average...Hospitality and retail headcounts increased slightly, while employment was unchanged at software and IT firms...Contacts were not planning for major changes in employment moving forward." While finding people eased up somewhat, there were still pockets of labor shortages. 

NY:

"Labor markets conditions continued to cool since the last report but remained solid. Employment growth slowed to a slight pace, though businesses in information services, manufacturing, transportation, and construction reported declines in employment in recent weeks. Though the availability of workers has improved, contacts noted that demand for workers softened as economic uncertainty inhibited hiring plans. Indeed, many mid-sized companies have stopped hiring, while smaller companies have become more selective in who they hire. Contacts across a variety of sectors noted that attrition remains exceptionally low."

Philly:

"Employment slowed to a slight pace of growth—following a modest pace in the prior period. In our monthly surveys, nonmanufacturing firms reported modest increases in full-time jobs but no change in part-time employment nor in the average employee workweek. Having fulfilled most of their backlogs, manufacturing firms reported a slight decrease in employment and a modest decline in the average employee workweek.

Several contacts noted increased layoffs of midcareer professionals from finance, tech, and highly leveraged firms in other sectors but observed that most secured new jobs within months. Several contacts, including staffing firms, noted that businesses were becoming more selective when hiring. One staffing firm observed that many businesses overhired during the pandemic, then held steady in 2023—they expect job levels to increase slowly as companies begin to hire again."

Cleveland:

"On balance, contacts reported that employment was flat to slightly down during the recent reporting period. Many firms across industries said they were maintaining headcount or hiring only to replace departing workers or underperforming staff. Some firms reduced staff to 'right size' in the face of lower demand, while others restructured by replacing select roles with automation or rotating staff among multiple locations. Contacts generally expected little change in employment in the coming months."