The impact of the coronavirus continued over the summer, as Delta variant slowed down services sectors in many parts of the United States during the summer, according to the Federal Reserve’s Beige Book.
Published eight times per year, the Beige Book summarizes activity from each of the 12 individual Federal Reserve Banks in the United States, two weeks prior to the central bank’s policy meeting. The report gathers anecdotal information on current economic conditions in the 12 districts through interviews with individuals both within and outside the Fed. The report provides key regional economic statistics, including personal income and gross state product.
Per the most recent survey of business conditions, U.S. economic activity slowed in July and August. While the summer is typically a time of greater spending on travel and tourism, those areas of the economy were hampered by fears of the highly-contagious Delta variant of the coronavirus.
Half of the Fed’s districts experienced price increases, including a "substantial escalation" in the cost of metals and metal-based products, as well as construction materials also carried much higher costs. Lumber, however, has dropped after seeing historically high levels earlier in the year.
As labour shortages are felt across the country, employment was also strong, with all districts reporting an increase, and several districts reporting an increase in wages.
The Federal Reserve will be meeting next week and this latest print will be highly influential as policymakers try to decide whether to end the $120 billion monthly bond purchases the central bank has been making since the pandemic started, to help lower long-term interest rates.
