WASHINGTON, May 27 (Xinhua) -- Economic activity declined across the nation, with most districts falling sharply, reflecting disruptions associated with the COVID-19 pandemic, U.S. Federal Reserve said in its latest Beige Book released on Wednesday.
"Consumer spending fell further as mandated closures of retail establishments remained largely in place during most of the survey period," the Fed said. "Declines were especially severe in the leisure and hospitality sector, with very little activity at travel and tourism businesses."
The Beige Book, published eight times per year, contains economic report from 12 Federal Reserve districts, each of which was monitored by a regional Federal Reserve Bank.
"A majority of districts reported sharp drops in manufacturing activity, and production was notably weak in auto, aerospace, and energy-related plants," according to the latest Beige Book.
"Residential home sales plunged due in part to fewer new listings and to restrictions on home showings in many areas," the report said. "Construction activity also fell as new projects failed to materialize in many Districts."
Commercial real estate contacts mentioned that a large number of retail tenants had deferred or missed rent payments, the report showed.
The latest Beige Book also noted that agricultural conditions worsened, with several districts reporting reduced production capacity at meat-processing plants due to closures and social distancing measures.
Energy activity also plummeted as firms announced oil well closures, which led to historically low levels of active drilling rigs, according to the report.
"Although many contacts expressed hope that overall activity would pick-up as businesses reopened, the outlook remained highly uncertain and most contacts were pessimistic about the potential pace of recovery," the Fed said.
On labor market, the Beige Book said employment continued to decrease in all districts, including steep losses in most districts, as social distancing and business closures affected employment at many firms.
Securing Paycheck Protection Program (PPP) loans helped many businesses to limit or avoid layoffs, although employment continued to fall sharply in retail and in leisure and hospitality sectors, the report said, referring to the federal program intended to help small businesses retain employees during the crisis.
"Contacts cited challenges in bringing employees back to work, including workers' health concerns, limited access to childcare, and generous unemployment insurance benefits," according to the report.
Overall wage pressures were mixed as some firms cut wages while others implemented temporary wage increases for essential staff or to compete with unemployment insurance, the report said.
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