Daily Management Review

Fed: US economy grows moderately but is held back by supply disruptions


The US economy grew at a moderate pace in most counties in October and November, but growth was held back by supply chain disruptions, according to the Beige Book, a summary of the Federal Reserve's (Fed) comments on the country's economic situation.

"Economic activity grew at a moderate pace in most counties in October and early November... Several counties noted that despite strong demand, economic growth was constrained by supply chain disruptions and labour shortages," the release reads.

Consumer spending also grew at a moderate pace, with small inventories holding back sales of products in some categories, particularly passenger cars. Leisure and hospitality sectors grew strongly in most counties amid a decline in cases of the delta strain of coronavirus. Growth in the construction and manufacturing industries was also constrained by labour shortages and supply disruptions. The energy sector grew vigorously in the period under review.

National employment grew at a moderate to strong pace in the counties. The Fed noted strong demand for labour, but difficulties in recruiting and retaining workers in the field were also present. Almost all counties noted significant wage increases due to staff shortages.

Price increases were moderate to strong in most economic sectors. The increase in production costs was influenced by high demand for raw materials, logistical difficulties and labour shortages. However, the growing availability of materials such as metals and semiconductors has helped to slow the rate of price increases.

source: cnn.com