By Ann Saphir

(Reuters] – One retailer from the U.S. Midwest wanted to raise its prices, but did not have the necessary staff members to change the tags.

A high-end chain of restaurants in the South allowed employees to “shift surf” between the various eateries they owned. This enabled them to tailor their work schedules and maximize their earnings. However, some restaurants were not able to take advantage of the new system.

In Alaska, Utah and elsewhere in the United States, many job applicants skipped interviews.

These stories, and many others, were featured in the Federal Reserve’s most recent Beige Book. It is a bi-monthly snapshot of America’s economy as reported by its business contacts across the country. These stories highlighted the fact that high inflation and labor shortfalls can sometimes collide, sometimes leading to outcomes that are suited for late-night talk shows monologues.

Anecdotes from the Beige Book also demonstrate why Fed Chair Jerome Powell is going to continue raising interest rates in spite of rising economic uncertainty due to Russia’s invasion Ukraine.

Powell explained Wednesday that Powell’s main motivation for Fed’s move is to lower inflation. This goal runs three times higher than the Fed’s 2% target.

Powell, however, highlighted the widespread improvement in labor market conditions in Wednesday’s monetary policy update. Low-wage workers are the only ones who see wage rises faster than high inflation, Powell stated.

He said that employers are struggling to fill job openings and an unprecedented number are leaving the workforce in search of new work. Wages are also rising at a faster pace than they have been for many years.

Beige Book reported that many businesses told Cleveland Fed employees were high-returning “for different reasons”, including the desire to work remotely, get higher wages, switch careers or have better working conditions.

According to a Minneapolis Fed contact, “Government workers may be eligible for benefits. However, working at a lower wage than the pizza delivery man is demoralizing.” This was the reason why people in the public sector are looking for other employment.

Richmond Fed heard from some companies that their employees were still losing work to firms who would pay higher wages, or are more remote.

Powell wants to lower interest rates in order not only to decrease demand but also increase the supply of goods and services.

This was a time when businesses were coming up with their own solutions. South Dakota’s transportation business reported that they had turned away “staggering amounts” of work because of a shortage of employees.

One retailer hired corporate employees to modify the tags in its stores, but the St. Louis Fed stated that others had “reported plans” to use electronic price tags to cut down on the amount of labor required to adjust prices.