The US economy has stalled in recent weeks, according to the Fed’s Beige Book

19 Apr. (EUROPE PRESS) –

The US economy has stagnated because “it has not changed substantially in recent weeks,” the US Federal Reserve (Fed) has stated in its Beige Book, a document that provides a detailed assessment of the economy by the country’s 12 regional central banks.

In this way, the x-ray is worse than that obtained last March, when this document estimated that the economy did grow “slightly” at the beginning of the year. “Nine of the districts (territorial demarcations that cover the regional central banks, bringing together several states of the country) reported no or a slight increase in activity, while three reported modest growth,” the Fed explained.

Consumption was “stable to slightly down,” with auto sales flat as only “a couple” districts reported an increase in sales and inventories. In contrast, the tourism sector was robust in most territories.

Manufacturing activity stagnated or fell despite disruptions in supply chains being unraveled. Later, the activity of the primary sector “almost” registered no changes and the energy markets “softened”. Transportation and cargo volumes also stagnated or declined as in the industry.

For their part, residential real estate sales and the new construction sector “modestly moderated” their activity. Non-residential construction “barely changed” and the changes in the demand for purchase and rental were, in general, null with a downward trend.

Regarding credit demand and credit flows, these fell both in their consumer and business variants. “Several districts reported that banks tightened concession standards due to growing uncertainty and concerns about liquidity,” the document has prepared. Even so, most of the demarcations registered an evolution of demand and sales of “stable on the rise” for non-financial services.

EMPLOYMENT

Employment registered a slowdown in growth due to the cooling of the labor market in some regions compared to previous Beige Books.

The Fed found that “a small number” of companies laid off en masse, mainly in “specific groups” of large companies. Other companies, however, opted for “natural attrition” of the workforce, only rehiring for those critically important positions.

Fed business contacts indicated that the labor market is no longer so “tight” and that companies benefit from higher employee retention. In addition, wage growth has moderated, although it remains “elevated.”

PRICES

With respect to prices, these grew “moderately”, although the progress of these increases “seems to be slowing down”.

Fed contacts reported “modest to sharp” falls in non-labor input prices and “considerably lower” transportation prices. Even so, producer prices for finished goods rose “modestly” but at a more contained pace.

Selling price pressures “generally eased” in the manufacturing and service sectors. Consumer prices rose on still-high demand, as well as rising inventory and service costs.

Home prices and rents stabilized in most districts, but remained close to all-time highs.

Fed contacts expect inflationary pressures on inputs to continue to be contained in the future, but they anticipated greater volatility in inputs compared to previous years.