“Consumer spending accelerated in retail and non-financial services businesses as COVID-19 cases declined across the country,” the Fed found in its Beige Book.
Economic activity in the United States has picked up a bit with the decrease in COVID cases, and the offices seem to be gradually replenishing, but inflation remains a pebble in the shoes of companies, especially in the manufacturing sector.
“Economic activity has grown at a moderate pace since mid-February,” the US central bank (Fed) said on Wednesday in its Beige Book, a survey of US businesses conducted in March and early April.
“Consumer spending accelerated in retail and non-financial services businesses as COVID-19 cases declined across the country,” the Federal Reserve said.
And, following two years of widespread teleworking, offices are starting to find their employees.
A Boston (northeast) company explained that professionals favor short-term rentals “given their uncertain space needs”. However, it provides for “a drop in office rents next year”.
Conversely, companies in the Cleveland region (northeast) are seeing demand remain strong.
“As workers return to the office, the extent to which (they) will go to the office, telecommute, or adopt a hybrid mode, is still not certain”, underlines the Philadelphia Fed.
Employers “continued to return to offices, which has helped retail and other convenience businesses,” said the Kansas City Fed, but merchants remain “uncertain regarding the impact of hybrid work.”
However, according to the Federal Reserve, “the growth outlook is clouded by the uncertainty created by recent geopolitical developments and rising prices.”
“Strong demand has allowed companies to pass cost increases on to customers, for example through fuel surcharges on freight and air freight rates,” the Fed said.
However, some companies surveyed have seen their sales decline following raising their selling prices.
The labor shortage also seems to be showing timid signs of improvement in some regions. But the lack of workers remains strong, and fuels, with inflation, rising wages.
The situation is expected to persist, due to “spikes in the prices of energy, metals and agricultural products” due to the war in Ukraine, and the new confinements linked to Covid-19 in China, which have “exacerbated the disruptions of the supply chain”.
