Economic activity declined in all districts, falling sharply in most, reflecting disruptions associated with the COVID-19 pandemic, the Federal Reserve said in its Beige Book on Wednesday.
Additional takeaways
"Employment continued to decrease in all districts."
"Consumer spending fell further as mandated closures of retail establishments remained largely in place during most of the survey period."
"Securing PPP loans helped many businesses to limit or avoid layoffs."
"Spending declines were especially severe in the leisure and hospitality sectors; auto sales were substantially lower than a year ago, although several districts noted recent improvement."
"Employment continued to fall sharply in retail and in the leisure and hospitality sectors."
"Contacts cited challenges in bringing employees back to work, including workers’ health concerns, limited access to childcare, and generous unemployment insurance benefits."
"A majority of districts reported sharp drops in manufacturing activity, and production was notably weak in auto, aerospace, and energy-related plants."
"Residential home sales plunged and construction activity also fell."
"Overall wage pressures were mixed - some firms cut wages, others raised them temporarily for the essential staff or to compete with unemployment benefits."
"Energy activity plummeted as firms announced oil well closures."
"Although many contacts expressed hope that overall activity would pick up as businesses reopened, the outlook remained highly uncertain."
"Most districts noted wage increases in high-demand and essential sectors, while wages were flat or declining in other sectors."
"Most district contacts were pessimistic about the potential pace of US economic recovery."
"Pricing pressures varied but were steady to down modestly on balance."
"Weak demand weighed on selling prices, with some contacts noting discounting for apparel, hotel rooms, and airfares."
"Supply chain disruptions and strong demand led to higher prices for some grocery items including meat and fresh fruit."
"One district reported that firms faced additional costs related to safety protocols and social distancing compliance."
Market reaction
The US Dollar Index largely ignored these remarks and was last seen gaining 0.08% on the day at 99.10.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD holds above 1.0700 ahead of key US data
EUR/USD trades in a tight range above 1.0700 in the early European session on Friday. The US Dollar struggles to gather strength ahead of key PCE Price Index data, the Fed's preferred gauge of inflation, and helps the pair hold its ground.
USD/JPY stays above 156.00 after BoJ Governor Ueda's comments
USD/JPY holds above 156.00 after surging above this level with the initial reaction to the Bank of Japan's decision to leave the policy settings unchanged. BoJ Governor said weak Yen was not impacting prices but added that they will watch FX developments closely.
Gold price oscillates in a range as the focus remains glued to the US PCE Price Index
Gold price struggles to attract any meaningful buyers amid the emergence of fresh USD buying. Bets that the Fed will keep rates higher for longer amid sticky inflation help revive the USD demand.
Sei Price Prediction: SEI is in the zone of interest after a 10% leap
Sei price has been in recovery mode for almost ten days now, following a fall of almost 65% beginning in mid-March. While the SEI bulls continue to show strength, the uptrend could prove premature as massive bearish sentiment hovers above the altcoin’s price.
US core PCE inflation set to signal firm price pressures as markets delay Federal Reserve rate cut bets
The core PCE Price Index, which excludes volatile food and energy prices, is seen as the more influential measure of inflation in terms of Fed positioning. The index is forecast to rise 0.3% on a monthly basis in March, matching February’s increase.