The Federal Reserve’s latest survey of regional U.S. economic conditions reveals a rising demand for skilled workers. This could increase salaries across multiple sectors of the economy at large.
According to economic activity information gathered from the central bank’s 12 districts and cited by The Wall Street Journal, hiring was “steady to stronger” from April through May, and increases in jobs and consumer spending contributed to a strengthening economy compared to earlier this year.
Friday’s monthly jobs report coincided with the Fed’s findings, and reported job gains of 217,000 in May with an unchanged unemployment rate of 6.3 percent. The U.S. economy has now regained the 8.7 million jobs lost in the recent recession.
Despite the good news, the economy is still at an incalculable loss of all of the jobs, spending and market growth that would have occurred in the absence of the subprime mortgage crisis that began in 2007, and companies in multiple regions said they had a hard time filling high-skilled, upper management jobs. Philadelphia firms in particular said that while they were able to fill some positions, they nonetheless “remain cautious.”
While wage growth overall remains more or less stagnant, salaries spurred by demand in specific high-skilled fields including information technology, engineering, professional services and certain skilled trades are rising according to Fed banks in Minneapolis, Kansas City and San Francisco.
“Skilled trade workers are very difficult to find and are driving up wages,” according to report data from Cleveland, and a staffing agency around Dallas said companies are paying out increased relocation compensation for engineers demonstrating a high level of proficiency.
Maryland and New York staffing agencies report job candidates receiving multiple offers – competition that should force salaries upward.
A National Bureau of Economic Analysis study released last month adds to those findings by revealing that immigrants in the fields cited by the Fed and others have contributed to wage growth overall since at least 1990, and showed that a one percent increase in high skilled jobs in any given city resulted in salary increases of 7 to 8 percent for Americans with college degrees, and 3 to 4 percent among those without.
Across other parts of the economy, the Fed reported increased auto sales in more than half of its districts, stronger tourist activity along the east coast, rising home prices across most of the country and “mostly robust” rental housing markets. Low inventories kept home sales down in Boston, New York and Kansas City, and mortgage lending was weak in Cleveland and Richmond.
The Fed will hold its next policy meeting on June 17-18.