The Federal Reserve’s Business Condition Survey found a slight increase in the economy at the beginning of the year, although parts of the country saw a slowdown due to an increase in COVID-19 cases.
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The Fed’s report released on Wednesday said the Fed’s 12 regional blocs reported a slight increase in economic activity in recent weeks.
But three districts ̵1; New York, Philadelphia and Cleveland – said activity was weaker.Two districts – St. Louis and Kansas City – said activity had generally been unchanged since the last Fed meeting in mid-December.
The Fed said reports on consumer spending, driving 70 percent of economic activity, were mixed. Some districts have reported declining retail sales and demand for hospitality and recreation services as local governments put stricter measures to try to contain the virus outbreak.
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“While the prospect of the COVID-19 vaccine will bolster business optimism for growth in 2021, this has been impacted by concerns about the latest virus recovery and the impact on medical conditions. Short term business
The Fed’s report, known as the Beige Book, will be the basis for discussion when central bank officials hold their next meeting on interest rates Jan. 26-27.
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The Fed pushed interest rates down to a record low of 0 to 0.25% last March. The expectation is that rates will remain very low throughout this year and beyond.
The Beige Book says that the demand for workers is greatest in manufacturing, construction and transportation. But employers in those industries reported problems filling up vacancies.
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“These employment issues are exacerbated by the recent recovery in COVID-19 cases and have resulted in disruption of workplaces in some areas,” the report said.
The leisure and hospitality sectors reported additional layoffs due to stricter quarantine measures in response to a rise in virus cases.