Vaccines, relaxed distancing boost economy
The Federal Reserve said Wednesday, June 2, that the U.S. economy grew at a moderate pace between early April and late May, according to the central bank’s Beige Book, which covers economic conditions in its 12 districts.
While a number of districts noted that increasing vaccination rates and easing social distancing measures had boosted the economy, they also noted that supply chain disruptions were negatively impacting on the economy, according to the report. Manufacturers pointed out that severe material and labor shortages, in addition to delivery delays, made it difficult to get products to customers.
The Fed also noted that it is still difficult for a number of companies to hire new workers, especially low-wage hourly workers, skilled laborers and truck drivers. A shortage of candidates has kept some companies from ramping up production, while the shortage has led some companies to cut operating hours in some less frequent cases.
“Overall, wage growth has been subdued and a growing number of companies have offered signing bonuses and increased starting wages to attract and retain workers,” according to the report. “Contacts expected demand for labor to remain strong, but supply to be limited, in the coming months.”
In the New York District, the Fed said consumer spending and tourism had increased “significantly”, while in the Boston District, restaurant sales had increased “sharply.”
Meanwhile, in the District of Minneapolis, manufacturing and construction activity has remained on the rise even with tremendous pressure on input costs, while in the District of San Francisco, conditions in manufacturing industries and agriculture continued to improve, according to the report.
And, in the St. Louis district, a number of Fed contacts noted that the expansion in demand for their offerings exceeded the expansion in their capacity.
The news comes after the US economy registered small increases in the pandemic year of 2020, after ending what has been one of the most dismal economic fallouts in history, according to the report. Beige January Book.