Federal Reserve Banks across the country collect anecdotes from contacts and hone in on key concerns for Federal Reserve Beige Book summaries, published eight times each year. Historically, insights about conditions affecting low- and moderate-income communities have come from the perspective of businesses. However, in September 2022, several Reserve Banks began including “Community Conditions” and “Community Perspectives” sections. These sections provide insight into local changes through direct accounts of nonprofit and community leaders and workforce professionals serving lower-income people. Here are some takeaways from the March 2023 Beige Book, which was prepared at the Federal Reserve Bank of New York and based on information collected on or before February 27, 2023.
Before you dive in, please note that the Beige Book summarizes comments received from contacts outside the Federal Reserve and is not a commentary on the views of Federal Reserve officials.
“Community leaders highlighted the pressures faced by many households from a lack of availability of childcare and preschool. Such services are operating at a reduced capacity because of teacher shortages, the decline in childcare centers, and the expiration of pandemic-era funding. Housing affordability remains a significant challenge, despite efforts to improve affordability through changes in zoning and regional collaborations to build more housing. A rise in homelessness and large influx of asylum seekers have increased demands on the region’s shelter and transitional housing sector.”
– New York Fed, Federal Reserve 2nd District, Community Perspectives
“Workforce development contacts indicated that the number of individuals seeking their services remained below prepandemic levels, though a few reported an uptick in recent months. Contacts noted that individuals were more likely to seek their services for training opportunities than for job placement. One contact mentioned that every worker who recently completed a manufacturing training program had at least two job offers. The difficulty manufacturers are having attracting and retaining workers led some to explore apprenticeships to meet their staffing needs. According to multiple contacts, lower-wage workers have greater options for employment and have become more selective in their job choices, prioritizing flexible work schedules in addition to pay. An eastern Kentucky contact reported increased demand for skilled trade workers as the region continued to rebuild from the July 2022 floods.”
– Cleveland Fed, Federal Reserve 4th District, Community Conditions
“District nonprofits serving low-income households noted that rising wages have not yet offset obstacles (e.g., access to childcare and transportation, affordable housing) challenging their ability to hold traditional full-time employment. Some workers have chosen part-time jobs, self-employment, and participation in the gig economy to maintain needed flexibility. Elevated food and gasoline prices continued to impact household cash flow. Consumer-facing contacts noted that rising prices resulted in increased use of credit for routine purchases.”
– Atlanta Fed, Federal Reserve 6th District, Community Perspectives
“Community development organizations and public administrators reported little change in overall economic activity in January and early February. State government officials again saw healthy growth in tax revenues and low demand for unemployment insurance. Small business support organizations reported rising costs for their clients, highlighting higher insurance premiums. Affordable housing developers said they were facing double-digit percentage increases in materials and labor costs, which were stressing the financing structures of projects. As financial supports associated with COVID-19 are coming to an end, nonprofit organizations reported greater demand for job search support as well as challenges to their own revenue streams.”
– Chicago Fed, Federal Reserve 7th District, Community Conditions
“Low to moderate income (LMI) households in the Tenth District reported greater difficulty securing adequate childcare over the past few months. Contacts cited both a lack of availability and rising costs at childcare facilities as the major barriers faced by households seeking care. Insufficient childcare availability and unaffordability continued to hinder workforce participation among LMI households. Recent policy efforts to improve childcare availability – for example, a recent zoning reform in Wichita, Kansas increased maximum home daycare capacity from 10 to 12 children – have reportedly been more than offset by an acceleration of closures of childcare facilities.”
– Kansas City Fed, Federal Reserve 10th District, Community Conditions
“Nonprofits continued to report higher demand for their services. Housing affordability remained a key concern amid high rents and housing costs. Evictions ticked up, and contacts said that higher interest rates and home prices were eroding the impact of down payment assistance programs. Lack of affordable childcare was another primary issue, impeding employment for lower-income women. Nonprofits expressed concern that high operating costs together with the recent decline in public funding would limit their capacity to provide services. A contact at a public university reported that enrollment was solid but the cost of attendance and the ability to pay tuition remained a challenge for students from low to moderate income households, particularly in light of the depletion of the Higher Education Emergency Relief Funds (HEERF). Notwithstanding, a community college contact noted increased enrollment in career and technical education.”
– Dallas Fed, Federal Reserve 11th District, Community Perspectives
“Demand for community and workforce development services remained high as elevated prices, interest rates, and uncertainty continued to challenge low-income households and rural communities across the District. In particular, households and community members sought support for childcare, food assistance, rental assistance, house affordability, mental health services, and financial literacy programs. Reports highlighted a recent increase in the number of new small businesses, especially those with diverse leadership, despite strong competition for labor. Some small business financiers raised concerns about capital access and increasing delinquency rates. Educators highlighted efforts to improve compatibility between their community college programs and local workforce needs.”
– San Francisco Fed, Federal Reserve 12th District, Community Conditions
Visit the March 2023 Beige Book report for a full national summary and more information about economic conditions from each Reserve Bank, including labor markets, financial services, real estate, and more.
