Fed Beige Book: Growth expectations worsen

The US Federal Reserve (Fed) reported that economic activity in the country showed “very little” change in April and early May, while future growth expectations deteriorated slightly. The report, which stated that manufacturing activity in most regions was flat to up and supply chain problems continued to develop, also indicated that demand for transportation services decreased. The US Federal Reserve (Fed) published the May issue of the “Beige Book” report, which includes assessments of the current situation in the American economy. The report, prepared with analyses from 12 branches of the bank, stated that economic activity in the country changed “very little” in April and early May, and noted that four regions reported small increases in economic activity, two regions reported slight to moderate decreases, and six regions showed no change. The report indicated that future growth expectations deteriorated slightly, but activity was expected to expand significantly, and that consumer spending was stable or higher in most regions, and that entertainment and accommodation spending increased. The report, which stated that manufacturing activity in most regions was flat to up and supply chain problems continued to develop, also indicated that demand for transportation services decreased. Construction activity has decreased The report reported that residential real estate activity increased in most regions, despite continued low inventories, while commercial construction and real estate activity generally decreased. The report noted that financial conditions were stable or slightly tighter in most regions, and that several regions reported an increase in consumer loan defaults, approaching pre-pandemic levels. The report emphasized that high inflation and the end of Covid-19 aid continue to strain the budgets of low- and middle-income households, increasing demand for social services, including food and housing. Price growth rates slowed in many regions The report noted that employment increased in most regions, albeit at a slower rate than previous reports. Overall, the labor market remained strong, with respondents reporting difficulty finding workers in various skill levels and sectors. The report noted that some respondents indicated that they were pausing hiring or reducing staff numbers due to weak actual or potential demand and greater uncertainty about the economic outlook. As in the previous report, wages increased moderately. The report also noted that prices had increased moderately, but the rate of increase in prices had slowed in many regions. The report noted that consumer prices continued to rise due to solid demand and rising costs, but some regions noted that consumers were more price sensitive than in the previous report.