Economic activity in the U.S. has increased over the past several weeks, according to the Federal Reserve’s Beige Book, although the gains were described as generally modest.
The Beige Book, a compilation of anecdotal evidence on economic conditions in the twelve Fed districts, also noted economic activity remains well below levels prior to the COVID-19 pandemic.
The Fed said manufacturing rose in most districts amid increased activity at ports and among transportation and distribution firms.
Consumer spending also continued to pick up, the report said, with the increase reflecting strong vehicle sales and some improvements in tourism and retail sectors.
However, the Fed noted many districts reported a slowing pace of growth in these areas, and total spending was still far below pre-pandemic levels.
The Beige Book also said commercial construction decreased and commercial real estate remained in contraction, while residential construction was described a bright spot, showing growth and resilience in many districts.
The report said employment increased overall, with gains in manufacturing cited most often, but some districts reported slowing job growth and increased hiring volatility.
On the inflation front, the Fed said price pressures increased since the last Beige Book in July but remained modest.
Fed Chair Jerome Powell recently announced a shift with regard to the price-stability side of the central bank’s dual mandate and the adoption of a “flexible form of average inflation targeting.”
Powell’s comments last Thursday were seen as an indication the Fed will leave interest rates at near-zero levels for the foreseeable future even if there is an acceleration in the pace of inflation.
Looking ahead, the Beige Book said the overall outlook among contacts was modestly optimistic, but a few districts noted some pessimism.
“Continued uncertainty and volatility related to the pandemic, and its negative effect on consumer and business activity, was a theme echoed across the country,” the Fed said.
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