The Federal Reserve said Wednesday (June 2) that the U.S. economy grew at a moderate clip between early April and late May, according to the central bank’s Beige Book, which covers economic conditions throughout its 12 districts.
While a number of districts noted that increased inoculation rates and eased social distancing measures boosted the economy, they also noted that supply chain disruptions were having a negative impact on the economy, the report stated. Manufacturers pointed out that broad shortages of materials and labor, in addition to delivery delays, made it challenging to get products to clients.
The Fed also noted that it is still a challenge for a number of companies to hire new workers, particularly low-wage hourly workers, skilled tradespeople and truck drivers. A lack of job candidates stopped some companies from bolstering output, while the shortage led some companies to curtail the hours of their operations in some less frequent cases.
“Overall, wage growth was moderate, and a growing number of firms offered signing bonuses and increased starting wages to attract and retain workers,” according to the report. “Contacts expected that labor demand will remain strong, but supply constrained, in the months ahead.”
In the New York district, the Fed said consumer spending and tourism increased “noticeably,” while, in the Boston district, eatery sales rose “sharply.”
Meanwhile, in the Minneapolis district, manufacturing and construction activity remained on the uptick even with formidable input cost pressures, while, in the San Francisco district, conditions in the manufacturing and agriculture industries kept improving, according to the report.
And, in the St. Louis district, a number of the Fed’s contacts noted that expansion in demand for their offerings exceeded expansion in their capacity.
The news comes after the American economy registered slight increases in the pandemic year of 2020, after ending what was among the most dismal economic fallouts in history, according to the Beige Book report in January.