Fed’s Beige Book reveals modest economic activity despite continued supply constraints

The Federal Reserve released its latest Beige Book Wednesday which revealed that economic activity has expanded at a modest to moderate pace since the middle of January. However, many Federal Reserve Districts reported that surges in COVID-19 cases did temporarily result in business disruptions. Some Districts also noted a temporary weakening in demand in the hospitality sector.

Of note, winter weather was also cited as a cause of the disruption. All Districts indicated supply chain issues and low inventories continued to restrain growth, especially in the construction sector.

“The early part of the year experienced decent economic growth in spite of ongoing shortages in labor and supplies,” said NAFCU Chief Economist and Vice President of Research Curt Long.

According to the Beige Book, banking contacts showed signs of weakening financial conditions, although loan demand was generally unchanged.


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