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As the economic recovery from the coronavirus crisis accelerates, labor shortages and supply chain disruptions are hindering businesses across the country.
According to the Fed’s Beige Book report, as consumer spending rebounded with the increase in vaccination rates and the relaxation of social distancing measures, the pace of the rebound in April and May accelerated. The report provides health-related information collected by the central bank’s regional counterparts. Anecdotal evidence. One of the largest economies in the world.
However, because it is difficult to purchase materials and workers, it is difficult for companies to meet this demand in some cases.
The report stated: “Manufacturers report that widespread shortages of materials and labor and delivery delays make it difficult to deliver products to customers.” “Similar challenges still exist in construction. Home builders often notice that low mortgage interest rates Driven by, the strong demand exceeded their ability to build, causing some people to limit sales.”
Labor shortages are also widespread, and almost all regions in the report point out the impact on recruitment and broader employment growth.
“Many companies still find it difficult to hire new workers, especially low-wage hourly workers, truck drivers and skilled businessmen,” it said. “The lack of job seekers has prevented some companies from increasing production and, less commonly, has caused some companies to reduce their business hours.”
Although the report pointed out that “more and more” companies provide benefits including signing bonuses and higher starting salaries to fill job vacancies, overall wage growth is “modest.”
The report added: “Contacts expect that labor demand will remain strong in the coming months, but supply will be limited.”
The Beige Book was released at a critical moment for the U.S. economy and its senior policymakers, because there is growing concern that recent inflationary pressures may be more persistent than many expected.
Wednesday’s report acknowledged that costs have risen “overall”, especially for construction and manufacturing raw materials.
The report said: “However, the increase in demand allows some companies, especially manufacturers, builders and transportation companies, to pass on most of the cost increase to customers.” “Looking forward, contacts expect to face increased costs and costs in the coming months. The issue of charging higher prices.”
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