Some segments of the US economy showed promising signs of rebounding from pandemic damage, but the picture remains decidedly mixed amid the uptick in Covid-19 infections, according to a Federal Reserve report Wednesday.
Most regions of the country reported that “economic activity increased modestly,” and employment rose – albeit slowly – as housing sales remained strong and manufacturing stayed on an upward trajectory, the central bank said in its “beige book” survey of economic conditions.
The world’s largest economy posted a record economic collapse of 31.4 percent in the April-June quarter of 2020 as businesses nationwide were forced to shut down and trade collapsed.
Activity bounced back later in the year as firms adjusted to new protocols and infections were brought under control, but that progress was threatened in the fall when Covid-19 cases surged again, pushing the single-day death toll to over 4,000.
“Although the prospect of Covid-19 vaccines has bolstered business optimism for 2021 growth, this has been tempered by concern over the recent virus resurgence and the implications for near-term business conditions,” the Fed said.
The report based on comments from the Fed’s 12 regions noted that while most districts said employment rose, “the pace was slow” and “a growing number of Districts reported a drop in employment.”
While manufacturing “continued to recover in almost all Districts, despite increasing reports of supply chain challenges,” some firms continued to struggle to find workers, as did those in construction and transportation.
Firms faced “difficulty attracting qualified workers, especially for entry-level and on-site positions. These hiring difficulties were exacerbated by the recent resurgence in Covid-19 cases,” the report said.
Across the country, three regions, including New York and Philadelphia reported declining activity, and two were flat, while those that saw an expansion described the change as “modest.”