Economic growth slowed slightly to a moderate pace from early July to August, as dining out, travel and tourism declined due to safety concerns around the rise of the COVID-19 Delta variant, according to the Federal Reserve’s sixth Beige Book release of the year. The report was based on information collected through Aug. 30.
Additional causes of the slowdown were attributed to supply disruptions and labor shortages. Among other things, auto sales were weak due to a shortage of microchips and home sales restrained on low supply.
Districts reported that inflation was steady but elevated, with half of the 12 districts saying the pace of price increases was strong and half describing it as moderate, the Fed noted. Some districts reported that businesses were finding it easier to pass along more cost increases through higher prices, and several districts said that businesses anticipate significant price hikes in the months ahead. Trends in loan volumes varied widely across districts, ranging from being down modestly to up strongly.