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Beige Book shows modest rebound in overall economic activity
The Federal Reserve's Beige Book released Wednesday detailed a modest rebound in economic activity in most districts; however, activity remained well below pre-coronavirus pandemic levels. Consumer spending continued to pick up, sparked by strong vehicle sales and some improvements in tourism and retail sectors but a slowing pace of growth was noted in many districts.
"The Fed’s Beige Book highlighted ongoing economic uncertainty and the unique challenges of a labor market where job losses are continuing to pile up, yet employers report struggles in filling open positions," said Curt Long, NAFCU's chief economist and vice president of research. The Beige Book report was based on information collected on or before Aug. 24.
On the labor market, the Beige Book noted firms reported a difficulty in finding necessary labor, which may be compounded by daycare availability and uncertainty over the coming school year.
In addition, a rise in furloughed workers being laid off permanently may factor in to the reported “slowing job growth and increased hiring volatility.”
Other notable insights from the latest Beige Book include:
- residential construction showed growth and resilience;
- wages were flat to slightly higher in most districts;
- residential real estate sales were notable higher, with both prices and demand continuing to rise and a shortage of inventory;
- loan demand increased slightly, led by solid residential mortgage activity;
- price pressures increased, but remained modest; and
- input prices generally rose faster than selling prices; however, they were moderate overall.