The Fed’s investigation of US business conditions found that although economic growth in parts of the United States slowed down due to the surge in COVID-19 cases at the beginning of the year, their economic growth was small.
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The Fed’s report on Wednesday stated that most of the Fed’s 12 regions reported moderate growth in economic activity in recent weeks.
But the three regions of New York, Philadelphia and Cleveland indicated that activity has weakened. Two regions-St. Louis and Kansas City-said that activity has remained basically unchanged since the Fed̵
The Fed said reports on consumer spending that drives economic activity growth by 70% are mixed. Some regions reported a decline in retail sales and a decline in demand for hospitality and leisure services as local governments took stricter measures to curb the surge in virus cases.
Before changing bond purchases, the Federal Reserve supports advance notice
The Federal Reserve stated: “Although the prospect of the COVID-19 vaccine has strengthened corporate optimism for growth in 2021, this concern has been eased due to the recent virus recovery and its impact on recent business conditions.”
When central bank officials hold the next interest rate meeting from January 26 to 27, the Fed’s report will be the basis for discussion.
The Federal Reserve maintains a stable interest rate and is expected to maintain a zero interest rate by 2023
In March last year, the Fed cut interest rates to a record zero as low as 0.25%. It is expected that interest rates this year and beyond will remain at an ultra-low level.
The beige book says that the manufacturing, construction and transportation industries have the greatest demand for workers, but employers in these industries have reported difficulties in filling job vacancies.
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The report said: “The recent resurrection of COVID-19 cases and the chaos in the workplace caused by certain areas have exacerbated these recruitment difficulties.”
Due to stricter containment measures against the surge in virus cases, the leisure and hotel industries reported further layoffs.