A US Federal Reserve survey of business conditions across the nation has found modest economic gains at the start of the year, although some parts of the US saw slowdowns stemming from a renewed surge of COVID-19 cases.
The Fed report released on Wednesday said that the bulk of the central bank’s 12 regions in the past few weeks reported modest gains in economic activity.
However, three districts — New York, Philadelphia and Cleveland — said that activity had weakened, while two districts — St Louis and Kansas City — said that activity was generally unchanged since last month, the report said.
The Fed said that reports on consumer spending, which drives 70 percent of economic activity in the US, were mixed. Some districts reported declines in retail sales and demand for hospitality and leisure services, as local governments imposed stricter measures to contain the surge in COVID-19 cases.
“The prospect of COVID-19 vaccines has bolstered business optimism for 2021 growth, [but] this has been tempered by concern over the recent virus resurgence and the implications for near-term business conditions,” the Fed said.
The report, known as the “beige book,” is the basis for discussions at Fed meetings, the next of which is scheduled to start on Jan. 26.
The central bank in March last year pushed interest rates down to a record-tying low of zero to 0.25 percent. The expectation is that rates would 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 US-wide surge in COVID-19 infections.
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