Fed Beige Book by Investing.com

© Reuters.

By Yasin Ebrahim Investing.com – The economy grew at a modest pace as a growing number of districts experienced a decline in job growth and a surge in inflation driven by rising input costs, according to the Book Fed Beige released Wednesday. The central bank’s Beige Book economic report, based on anecdotal information collected by the Fed’s 12 reserve banks as of Jan. 4, showed that the US economy and inflation expanded at a modest rate, although the Employment pace slowed in most districts. “Economic activity increased modestly from the previous Beige Book period … and almost all districts saw modest price increases,” the report said. While a “growing number of districts reported a drop in employment levels relative to the previous reporting period.” The somewhat bleaker context for the job market comes as the rise of the virus continues to dampen business optimism in the short term despite the launch of the vaccine. “While the outlook for COVID-19 vaccines has bolstered business optimism for growth in 2021, this has been tempered by concerns about the recent resurgence of the virus and the implications for short-term business conditions,” according to the report . Moderate business optimism and slower job growth appear to be taking a toll on consumer spending, although online spending continues to enjoy healthy demand. “Some districts noted declines in retail sales and demand for entertainment and hospitality services, largely due to the recent surge in COVID-19 cases and tighter containment measures … Most districts reported an intensification of the Ongoing shift from in-person shopping to online sales during the holiday season. ”

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