Economic activity in the U.S. has recently grown at a modest to moderate rate, according to the Federal Reserve’s Beige Book, although the pace of growth has slowed.
The Beige Book, a compilation of anecdotal evidence on economic conditions in each of the twelve Fed districts, attributed the slowdown to supply chain disruptions, labor shortages, and uncertainty around the Delta variant of COVID-19.
The report said a majority of Fed districts indicated positive growth in consumer spending, although auto sales were widely reported as declining due to low inventory levels and rising prices.
Manufacturing grew moderately to robustly in most parts of the country, the Beige Book said, while growth in non-manufacturing activity ranged from slight to moderate for most districts.
The Fed also said employment increased at a modest to moderate rate in recent weeks, as demand for workers was high, but labor growth was dampened by a low supply of workers.
On the inflation front, the Beige Book said most districts reported significantly elevated prices, fueled by rising demand for goods and raw materials.
Reports of input cost increases were widespread across industry sectors, driven by product scarcity resulting from supply chain bottlenecks, the Fed said.
Looking ahead, the report said outlooks for near-term economic activity remained positive, but some districts noted increased uncertainty and more cautious optimism than in previous months.
The Beige Book is typically released about two weeks before the Fed’s next monetary policy meeting, which is scheduled for November 2nd and 3rd.
The Fed has recently indicated it could announce plans to begin scaling back its asset purchases following the meeting.