Nearly every Fed district noted businesses having trouble filling positions, especially for highly-skilled workers like engineers and IT specialists.
Table of Contents:
- Manufacturers Upbeat on Output, But Worry about Border Tax, Labor Shortages: Fed
- Price Pressures 'Little Changed'
Businesses in some parts of the country, while generally upbeat, are concerned about the uncertainty surrounding the impending policies of US President Donald Trump, the Federal Reserve said Wednesday.
The Fed's survey of the economy also showed that labor markets continue to tighten across the country, with many regions finding it harder to fill positions, but price pressures have not yet raised inflation concerns.
"Some respondents expressed concern about policy changes in the new administration and associated uncertainty," the Boston Fed said in the so-called Beige Book report, which collects views of economists, business contacts and others nationwide in preparation for the March 14-15 monetary policy meeting.
The Cleveland Fed noted that "the auto industry is concerned about the possible impacts of a border adjustment tax."
The Trump administration is looking at a possible tax change that would tax imports but not exports, but the auto industry cautions that "auto parts cross borders multiple times prior to final assembly," and such a tax "would likely result in higher sticker prices" for vehicles.
The Dallas Fed also noted "increased uncertainty" about coming policy changes especially in the manufacturing sector. In Fed districts across the country, manufacturers were optimistic about business outlook in the near term, but some worried about the effect of possible border adjustment taxes on the auto industry, skilled labor shortages and restrictions on the HB1 visa program on their bottom line.