|

Fed's Beige Book: Overall outlook was modestly optimistic

Employment in the twelve Fed districts increased overall with gains in manufacturing cited most often, the US Federal Reserve noted in its Beige Book.

Additional takeaways as summarized by Reuters

"Some districts also reported slowing job growth and increased hiring volatility, particularly in service industries, with rising instances of furloughed workers being laid off permanently as demand remained soft."

"Firms continued to experience difficulty finding necessary labor, a matter compounded by daycare availability, as well as uncertainty over the coming school year and jobless benefits."

"Economic activity increased among most districts, but gains were generally modest, activity remained well below pre-crisis levels."

"Manufacturing rose in most districts, consumer spending continued to pick up."

"Wages were flat to slightly higher in most districts with greater pressure cited among lower-paying positions."

"Some firms also rescinded previous pay cuts."

"Residential construction was a bright spot."

"Overall outlook among contacts was modestly optimistic but a few districts noted some pessimism."

"Other firms have looked to roll back hazard pay for high-exposure jobs, though some have chosen not to do so for staff morale and recruitment purpose."

"Input prices generally rose faster than selling prices but were moderate overall."

"Price pressures increased since the last report but remained modest."

"Notable exceptions included inputs experiencing demand surges or supply-chain disruptions, such as structural lumber, for which prices spiked."

"Several districts also reported that costs for personal protective equipment and inputs to it remained elevated."

"Freight transportation rates rose in several districts due to a resurgence in demand."

Market reaction

The US Dollar Index edged slightly higher on these remarks and was last seen gaining 0.53% n the day at 92.81.

Author

Eren Sengezer

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

More from Eren Sengezer
Share:

Editor's Picks

EUR/USD stays well bid beyond 1.1700

EUR/USD keeps the bid tone in place toward the end of the NA session on Tuesday, trading well north of the 1.1700 barrier on the back of the intense decline in the US Dollar, all amid the resurgence of the “Sell America” trade. Moving forward, investors’ attention will be on the release of US PCE data on Wednesday.

GBP/USD eases from tops, back to 1.3460

GBP/USD is extending its winning streak into a second session, now surrendering some gains and receding toward the 1.3460 area on Tuesday. Cable’s rebound remains propped up by the persistent selling pressure on the Greenback, while the British Pound appears, for now, largely unfazed by the mixed signals from the UK labour market.

Gold conquers the $4,700 mark on Trump’s threats

Gold builds on Monday's gains and hits a new record high around $4,760 per troy ounce on Tuesday. Escalating geopolitical tensions and growing fears of deepening trade conflicts, alongside the broad-based selling pressure surrounding the US Dollar continue to fuel the yellow metal’s rally.

Ethereum falls below $3,000 as researcher suggests address poisoning is inflating activity

Ethereum's recent surge in network activity can be traced to increased address poisoning attacks following a decline in gas fees, according to onchain researcher Andrey Sergeenkov.

Greenland tariffs: What happened, and how to position for the new Europe risk premium

Over the weekend, President Trump threatened a new round of tariffs on goods from Denmark, Norway, Sweden, France, Germany, the Netherlands, Finland and the UK, with reporting flagging 10% from February 1 and a possible step-up later.

Crypto Today: Bitcoin, Ethereum and XRP extend correction as rising geopolitical tensions fade risky sentiment

Bitcoin (BTC), Ethereum (ETH), and Ripple (XRP) prices are extending their losses on Tuesday as risk-on sentiment fades amid rising geopolitical tensions over Greenland.