The Federal Reserve report for the month of June 2022

Each Federal Reserve Bank in the US gathers anecdotal information on current economic conditions in its District through reports from Bank and Branch directors and interviews with key business contacts, economists, market experts, and other sources.

The overall economic activity expanded at a modest pace, on balance, since mid-May; however, several Districts reported growing signs of a slowdown in demand. Most Districts reported that consumer spending moderated as higher food and gas prices diminished households’ discretionary income. Due to continued low inventory levels, new auto sales remained sluggish across most Districts.

Most Districts continued to report wage growth. One-third of Districts indicated that employers were considering or had given employees bonuses to offset inflation-related costs while in two Districts, workers requested raises to offset higher costs. A quarter of Districts indicated wage growth will remain elevated for the next six months.

Dallas – Eleventh District

Economic growth in the district slowed to a modest pace partly due to elevated prices, rising interest rates, and uncertainty hampering demand in manufacturing, housing, and services. Employment continued to expand broadly. Staffing challenges remained widespread, with many firms reporting that they were a drag on revenue growth. However, shortages appeared to be most acute for truck drivers, pilots, health care staff, and oil field workers. Staffing firms continued to report that filling lower-skilled positions were harder than higher-skilled jobs. Wage growth remained robust amid a tight labor market. Multiple firms reported offering higher pay or bonuses to retain and/or hire employees.