The Fed's report, known as the beige book, will form the basis for discussions when central bank officials hold their next meeting on interest rates Jan. 26-27.
The Fed pushed interest rates down to a record-tying low of zero to 0.25% last March. The expectation is that rates will remain at ultra-low levels through this year and beyond.
The beige book said that the demand for workers was the strongest in manufacturing, construction and transportation, but employers in those industries were reporting difficulties filling job openings.
“These hiring difficulties were exacerbated by the recent resurgence in COVID-19 cases and the resulting workplace disruptions in some districts,” the report said.
The leisure and hospitality sectors reported further layoffs due to stricter containment measures in response to a surge in virus cases.