A study by the US Federal Reserve found modest economic gains at the beginning of the year, although in some parts of the country there has been a slowdown resulting from the resumption of COVID-19 cases.
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The Fed’s report, released Wednesday, said most of the Fed’s 12 regions have seen moderate gains in economic activity in recent weeks.
But three districts ̵
The Fed said consumer spending reports, which drive 70% of economic activity, are mixed. Some areas report declining retail sales and demand for hospitality and leisure services as local authorities impose tougher measures in an attempt to curb the rise in viruses.
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“Although the outlook for COVID-19 vaccines has boosted business optimism for growth in 2021, this has been mitigated by concerns about the recent resurgence of the virus and the implications for short-term business conditions,” the Fed said.
The Fed report, known as the Beige Book, will form the basis for discussions when central bank officials hold their next meeting on interest rates on January 26-27.
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The Fed cut interest rates to a record low from zero to 0.25% last March. It is expected that the levels will remain at ultra-low levels this year and beyond.
The beige book says that the demand for workers is strongest in manufacturing, construction and transport, but employers in these industries report difficulties in filling jobs.
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“These recruitment difficulties have been exacerbated by the recent resumption of COVID-19 cases and the resulting work interruptions in some areas,” the report said.
The leisure and hotel sectors reported further redundancies due to tighter containment measures in response to the increase in virus cases.