The US Federal Reserve notes in its Beige Book Wednesday evening that growth has remained modest. It remains constrained by supply chain disruptions and labor shortages, but price increases have started to slow.
US growth remains modest, but price increases have slowed, notes the Fed | Photo credits: Istock
In its Beige Book, which serves as a preparatory document for the next meeting of the central bank’s monetary policy committee, scheduled for the end of the month, the Fed reports that economic activity has grown at a rate ” modest During the last weeks of 2021.
Growth continues to be constrained by supply chain disruptions and labor shortages. Despite this modest rate of growth, business demand for materials and labor remains high. Consumer spending, on the other hand, continued to grow at a sustained pace before the rapid spread of the Omicron variant. A sharp decline has however been observed in terms of leisure travel, hotel occupancy and restaurant attendance, while the number of new cases of Covid has increased in recent weeks.
Rising wages
Although ” optimism remains perceptible ยป, Several districts cite somewhat diminished growth prospects in recent weeks. The manufacturing sector continued to grow nationally, with some regional differences in the pace of growth.
Hiring difficulties have led to a sharp rise in wages nationwide, with several districts highlighting rising labor costs. It remains well above historical averages in all industries, in all worker demographics and in all geographies.
Price increases have nonetheless slowed down slightly from the sustained pace recorded in recent months, although pressures remain strong due to issues related to supply difficulties.