Economic activity rose with all Districts reporting increased activity, but remained well below pre-pandemic levels according to the just-released Federal Reserve Beige Book. The report was based on information collected through July 6th.
As nonessential business were allowed to reopen, retail sales rose in all Districts led by a surge in vehicle sales and growth in the food and beverage and home improvement sectors. Leisure and hospitality spending improved, but still remains far below pre-COVID levels. Most Districts saw an improvement in manufacturing activity, demand for professional and business services, and transportation activity.
Loan demand remained stagnant outside of some Paycheck Protection Program (PPP) and increased residential mortgage activity. Firms reported that the PPP and loan deferrals provided sufficient liquidity for the near term. Outlook remains uncertain as contacts are still unsure of how long the COVID-19 pandemic will continue.
Employment increased in all Districts as businesses reopened, led by the retail and leisure and hospitality sectors. Despite the gains in employment, payrolls in all districts remain low and job turnover remained high. Respondents in every District reported difficulty in bringing back workers because of health and safety concerns, childcare needs, and generous unemployment insurance benefits.
Read the full Federal Reserve report.