Economic activity expanded at a moderate pace from early April to late May, at a somewhat faster rate than the prior reporting period as consumer spending strengthened due in part to increased COVID-19 vaccinations, according to the Federal Reserve’s fourth Beige Book release of the year. The report was based on information collected through May 25.
Wage growth was moderate with a growing number of firms offering signing bonuses and increased starting wages to attract and retain workers. Contacts told the Fed they expect that labor demand will remain strong, but supply constrained, in the months ahead.
Lending volumes increased modestly, with gains in both household and business loans, and demand for professional and business services increased moderately. Factory output increased even as significant supply chain challenges continued to disrupt production. Manufacturers reported that widespread shortages of materials and labor along with delivery delays made it difficult to get products to customers.