May 31. (EUROPE PRESS) –
The US economy remains stagnant as its activity levels “barely changed between April and early May”, the US Federal Reserve (Fed) has stated in its Beige Book, a document that provides a detailed assessment of the economy by the 12 regional central banks of the country.
In this way, the x-ray is similar to the one obtained last April, when this document did not appreciate a “substantial” change with respect to the previous report. “Four of the districts [demarcaciones territoriales que cubren los bancos centrales regionales, aglutinando varios estados del país] reported small increases in activity, six no change, and two slight to moderate declines,” the Fed explained.
The central bank ensures that its contacts in the business world report that expectations for the future “have worsened slightly”, although not enough to reverse the expansion of activity.
Consumption remained stable or increased in most districts, especially thanks to growth in leisure and hotel spending. For its part, the education and health sector remained, in general, unchanged, while the manufacturing sector stagnated or grew in “almost all” regions as the disruptions in supply chains were resolved. In this sense, the transport sector contracted, especially due to the lower demand for trucks for the movement of goods.
Construction picked up in almost all districts to coincide with the depletion of the ‘stock’ of homes for sale, while commercial construction fell in general and with office spaces “as a weak point” in the sector.
For their part, future estimates of agricultural income fell in “almost all” districts while the energy sector remained “stable to the downside” due to natural gas prices.
On their side, financial conditions did not change or “adjusted somewhat” in most districts. Fed contacts confirmed an increase in delinquency, which “is returning to levels close to pre-pandemic levels.”
“High inflation and the end of aid for Covid-19 continued to put pressure on the budgets of lower- and middle-class families, intensifying the demand for social services, including food and housing,” the Fed has certified.
WORKING MARKET
Employment grew in “almost all” demarcations, “although at a slower rate than in previous reports.” In sum, the labor market remained “vigorous”, with contacts reporting difficulties in closing positions in “a wide range of industries and technical qualifications”.
Although informants claimed that the job market “has cooled off,” others said it was easier to hire in construction, transportation, and finance.
However, “many” confirmed that they had no vacancies and “some” warned that they were pausing hiring or reducing staff “due to weak, current or future demand, or growing macroeconomic uncertainty.” HR companies reported slower growth in demand for their services. Finally, the Fed has noted that wages grew “modestly” in line with the previous Beige Book.
PRICE EVOLUTION
During the analysis period, prices grew “moderately”, although slowing down in many territories. Fed contacts expect this dynamic to continue “in the coming months.”
Consumer prices will advance thanks to “solid demand and rising costs.” Several of the districts pointed out that users have become more sensitive to price hikes compared to the last Beige Book.
In general, non-labor expenses grew, although “the pressure on the cost side has eased and some items were reduced, such as shipping by ship and certain raw materials.” Home sales and rental prices grew “slightly” in most districts, unlike the last report.
