US economic growth “downshifted slightly” in July and last month amid shortages of workers and materials, as well as concerns about the rise of the Delta variant of SARS-CoV-2, the Federal Reserve said on Wednesday.
While shortages also caused rising wages and prices in some areas, the report of a slower recovery could add weight to pressure on the central bank to hold off withdrawing stimulus to the economy.
The US surge in COVID-19 infections has led to the return of some restrictions and delayed the return of workers to some offices.
In its “beige book” report on the economy, the Fed said the recent slowdown was largely due to “a pullback in dining out, travel and tourism in most districts.”
However, activity declined in some areas of the country due to labor issues and “pervasive resource shortages” that also were driving up prices, the report said.
With inflation picking up and progress made on restoring jobs lost during the pandemic, US Federal Reserve Chair Jerome Powell has signaled that the central bank expects to begin to pull back on its massive bond-buying program by the end of the year.
In a speech on Wednesday, the Federal Reserve Bank of New York president John Williams, cautioned that “a full recovery from the pandemic will take quite some time.”
He also echoed Powell’s position that the spike in inflation is mostly due to temporary issues and the rate should drop back to about 2 percent next year from double that currently.
A sustained rise in inflation is a concern for the White House, which on Wednesday announced an initiative to slow rising meat prices.
Linking consolidation in the meat industry to food price increases, the White House said it would invest US$1.4 billion aimed at small businesses in the food supply chain.
The Fed report said that sales of vehicles and homes in the US were depressed by low inventory, but construction rose modestly.
The analysis, prepared in advance of the Fed’s next policy meeting on Sept. 21 and 22, said that most districts are “optimistic about near-term prospects, though there continued to be widespread concern about ongoing supply disruptions and resource shortages.”
The rapid reopening of businesses following the pandemic shutdowns has posed a challenge for global shipping and production of raw materials, including a worldwide semiconductor crunch that has hit the vehicle sector.
INTERGRATION: Jensen Huang said that every Nvidia department and function of the company should be using AI, after reportedly saying staff were ‘insane’ not to Nvidia Corp is in a “unique” position in the market, despite facing intensifying competition, chief executive officer Jensen Huang (黃仁勳) said during a brief visit to Taiwan yesterday amid a potentially growing challenge from Google for the artificial intelligence (AI) chip market. Huang told reporters that the AI market is “extremely large” and that while there is a lot of competition, Nvidia’s “condition is very strong and our position is very unique.” Huang, who arrived in Taipei on Thursday, was responding to questions about the possible threat posed by Google. According to a report in The Information on Tuesday, Meta has been in
Charming US President Donald Trump one week, angering China the next, Japanese Prime Minister Sanae Takaichi has had a busy start and is riding high in the polls, all on a few hours of sleep a night. However, the honeymoon might end soon for the Margaret Thatcher-admiring leader if a spat with China escalates further and she fails to keep inflation in check. “I believe Prime Minister Takaichi will surely do what she needs to do, so I trust her,” Kozue Otsuka, 50, told reporters at a festival this week for business owners seeking good fortune. While buying a lucky kumade rake featuring
INSULATED: The company said it is less exposed to global complications, as it has built a strong footprint worldwide, and has multiple sources of rare earths and raw minerals Merck Group yesterday said it would ramp up production next year at its new flagship facility in Kaohsiung’s Lujhu District (路竹) to satisfy growing demand for advanced semiconductor materials and specialty gases, and to address supply resilience issues amid mounting geopolitical risks. Merck made the remarks during a news conference before the inauguration of its 500 million euros (US$582.1 million) facility, which is also to supply other markets in the Asia-Pacific region, it said. Merck executive board deputy chair and electronics CEO Kai Beckmann told reporters the company adopted a “local-for-local” strategy about seven years ago to address the cycle time of
TECH TITANS: Amazon’s latest chip joins Google in competing for the 90 percent market share held by Nvidia, which claims it is ‘a generation ahead of the industry’ Amazon Web Services (AWS) on Tuesday launched its in-house-built Trainium3 artificial intelligence (AI) chip, marking a significant push to compete with Nvidia Corp in the lucrative market for AI computing power. The move intensifies competition in the AI chip market, where Nvidia dominates with an estimated 80 to 90 percent market share for products used in training large language models that power the likes of ChatGPT. Google last week caused tremors in the industry when it was reported that Facebook-parent Meta Platforms Inc would employ Google AI chips in data centers, signaling new competition for Nvidia. This followed the release last month of
RSS