(Washington) Economic activity in the United States has picked up a bit as COVID-19 cases dwindle, and offices seem to be slowly picking up, but inflation remains a pebble in the shoes of businesses, especially in the manufacturing sector.
Posted yesterday at 4:09 p.m.
“Economic activity has grown at a moderate pace since mid-February,” the US central bank (Fed) said on Wednesday in its Beige Book, a survey of US businesses conducted in March and early April.
“Consumer spending accelerated in retail and non-financial services businesses as COVID-19 cases declined across the country,” the Federal Reserve said.
And, after two years of widespread teleworking, offices are starting to find their employees.
A Boston company explained that professionals prefer short-term rentals “given their uncertain space needs”. However, it provides for “a drop in office rents next year”.
Conversely, businesses in the Cleveland area are seeing demand remain strong.
“As workers return to the office, the extent to which (they) will go to the office, telecommute, or adopt a hybrid mode, is still not certain”, underlines the Philadelphia Fed.
Employers “continued to return to offices, which has helped retail and other convenience businesses,” said the Kansas City Fed, but merchants remain “uncertain about the impact of hybrid work.”
However, according to the Federal Reserve, “the growth outlook is clouded by the uncertainty created by recent geopolitical developments and rising prices”.
“Strong demand has allowed companies to pass cost increases on to customers, for example through fuel surcharges on freight and air freight rates,” the Fed said.
However, some companies surveyed have seen their sales decline after raising their selling prices.
The labor shortage also seems to be showing timid signs of improvement in some regions. But the lack of workers remains strong, and feeds, with inflation, the rise in wages.
The situation is expected to persist, due to “spikes in energy, metal and agricultural commodity prices” due to the war in Ukraine, and new COVID-19 related lockdowns in China, which have “worsened the supply chain disruptions”.