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Discussion Paper
Is Wage Growth Normalizing? What Fifth District Businesses Are Saying About Wages
In the past few years, firms across the nation have reported increased wages due, at least in part, to a supply of labor that cannot keep up with robust demand. Last July, we wrote about how Fifth District firms reported notable acceleration in the growth rates of both realized and expected wages. More recently, wage growth has declined, and a rising share of firms expect their wage growth for 2024 to be "about normal." However, wage growth remains above pre-COVID-19 levels. Our business surveys suggest that wage growth might remain elevated for some time.
Working Paper
Estimates of Cost-Price Passthrough from Business Survey Data
We examine businesses' price-setting practices via open-ended interviews and in a quantitative survey module with business contacts from the Federal Reserve Banks of Atlanta, Cleveland, and New York in December 2022 and January 2023. Businesses indicated that their prices were strongly influenced by demand, a desire to maintain steady profit margins, and wages and labor costs. Survey respondents expected reduced growth in costs and prices of about 5 percent on average over the next year. Backward-looking, forward-looking, and hypothetical scenarios reveal average cost-price passthrough of ...
Discussion Paper
Remotely Interesting? Sensing Tools Shed Light on On-Site Expectations in the Fifth District
The Richmond Fed uses a set of tools to continually gather information on economic activity across our Fifth District. These sensing tools include our industry roundtable conversations with business and community leaders and our monthly business surveys. In addition to collecting regular data on indicators such as wage growth and price changes, we are also keeping a pulse on timely topics that play into firm decision-making. One key pattern we've monitored is the intensity of remote work and return-to-office decisions, as businesses and workers have navigated pandemic-era uncertainty and a ...
Discussion Paper
Fifth District Firms Are Cautiously Optimistic About 2024 Despite Concerns
At the start of both 2023 and 2024, we asked our business survey panelists about their expectations for the upcoming year. In our recent December survey, we found that most manufacturing firms were pessimistic about the U.S. economy going into 2024 but were more bullish about their own-firm prospects. Additionally, manufacturers were more likely than services firms to expect lower revenue, employment, spending, and price growth in 2024 than they experienced before COVID-19.