Beige Book: Economic Activity Expanding at a Moderate Pace

Economic activity expanded modestly for most Districts as the COVID-19 vaccine distribution has raised business optimism, according to the just-released Federal Reserve Beige Book. The report was based on information collected through February 22nd.

Consumer spending was mixed across the districts as the leisure and hospitality sector continued to be restrained by ongoing COVID-19 restrictions, although some Districts did report an improvement in travel and tourism activity. Most Districts saw an improvement in manufacturing activity, despite supply chain issues.

Some Districts noted that financial institutions experienced declines in loan volumes, but most cited lower delinquency rates and elevated deposit levels. Demand for residential mortgages remains high throughout most Districts, driven by historically low mortgage interest rates.

Employment increased in all Districts, although at a relatively slow pace. Labor demand was mixed by industry and by skill level. Shortages were noted by contacts as most prevalent among low-skill occupations and skilled trade positions because of health and safety concerns, childcare needs, and generous unemployment insurance benefits.

Read the full Federal Reserve report.