U.S. economy grows modestly amid COVID-19 restrictions: Fed survey

2021-03-04 09:33

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WASHINGTON, March 3 (Xinhua) -- The U.S. economy expanded modestly from January to mid-February amid COVID-19 restrictions and supply chain disruptions, according to a Federal Reserve (Fed) survey released on Wednesday.

"Overall conditions in the leisure and hospitality sector continued to be restrained by ongoing COVID-19 restrictions," the Fed said in its latest survey on economic conditions, known as the Beige Book, based on information collected from its 12 regional reserve banks.

Despite challenges from supply chain disruptions, overall manufacturing activity for most Fed districts increased moderately from the previous report, the survey said.

Reports on consumer spending and auto sales were mixed, while employment levels rose slowly over the period, according to the survey.

Business contacts expect modest improvements in employment levels in the near term, and wage increases are expected to persist or to pick up somewhat over the next several months, the survey said.

The survey also showed that nonlabor input costs rose moderately over the reporting period, with steel and lumber prices increasing notably.

"In many Districts, the rise in costs was widely attributed to supply chain disruptions and to strong overall demand," it said.

Most businesses remain optimistic regarding the next 6-12 months as COVID-19 vaccines become more widely distributed, according to the survey.

The Fed decided in January to hold its policy rate near zero and continue its asset purchase program at least at the current pace of 120 billion U.S. dollars per month until it sees "substantial further progress" in employment and inflation.
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