Fed's Beige Book: Most Fed districts say economic activity increased modestly

A majority of the Federal Reserve's districts reported that employment rose albeit at a slower pace and noted that the recovery remains incomplete, the Fed's Beige Book showed on Wednesday.

Additional takeaways as summarized by Reuters

"A growing number of districts reported a drop in employment levels relative to the previous reporting period."

"Labor demand was strongest in the manufacturing, construction, and transportation sectors."

"Most Fed districts said economic activity increased modestly since the previous beige book period, but conditions remained varied."

"Some employers noting staffing shortages and difficulty attracting qualified workers, especially for entry-level and on-site positions."

"Two districts reported little or no change in activity, while two others noted a decline."

"Hiring difficulties were exacerbated by the recent resurgence in COVID-19 cases and the resulting workplace disruptions in some districts."

"Contacts in the leisure and hospitality sectors reported renewed employment cuts due to stricter containment measures."

"Reports on consumer spending from Fed districts were mixed."

"Manufacturing activity continued to recover in almost all districts."

"Firms in most districts reported that wages increased modestly but generally remained weak."

"Residential real estate activity remained strong; weak conditions in commercial real estate persisted."

"Employers in some districts reported raising wages or offering more generous benefits, such as year-end bonuses and flexible work arrangements, to limit employee turnover."

"Banking contacts saw little or no change in loan volumes."

"Almost all districts saw modest price increases since the last report."

Market reaction

The US Dollar Index showed no immediate reaction to this publication and was last seen gaining 0.25% on the day at 90.31.

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