FILE- In this Saturday, Nov. 28, 2020, file photo, customers browse while shopping for books at the Strand Bookstore, an independent family owned bookstore founded in 1927 in New York. A Federal Reserve survey of business conditions around the country found that economic activity in several regions was slowing in November as coronavirus cases surged. The report, released Wednesday, Dec. 2, 2020, and known as the beige book, will be used by Fed officials when they hold their last meeting of the year on Dec. 15-16 to discuss possible changes to the central bank's interest-rate policies.. (AP Photo/Mary Altaffer)

Fed reports slowing US economic activity due to virus surge

Fed reports slowing US economic activity due to virus surge

WASHINGTON — A Federal Reserve survey of business conditions around the country found that economic activity in several regions slowed in November as coronavirus cases surged.

The Fed report released Wednesday said that overall, the Fed’s 12 regional banks characterized the economic expansion as “modest or moderate.” But it noted that three Midwest regions and the Philadelphia region reported activity had begun to cool in early November as COVID-19 cases surged.

Four districts reported “little or no growth” during November, while five others reported that activity remained well below pre-pandemic levels in some sectors.

Kathy Bostjancic, chief U.S. financial economist for Oxford Economics, said the latest Fed survey showed the recovery continues to be uneven across many sectors of the economy.

The report said that among the sectors doing better were manufacturing, housing construction and existing home sales. But banks said there had been deterioration in their loans, particularly those to retailers and the leisure and hospitality industries.

The report said that most districts found that local businesses’ optimism has “waned,” with many citing concerns about the wave of virus cases and renewed lockdown restrictions. The report also said there was concern about the looming expiration dates for government support programs, including extended unemployment benefits and the moratoriums that have been in place on evictions and foreclosures.

The report, known as the beige book, will be used by Fed officials when they hold their last meeting of the year on Dec. 15-16 to discuss possible changes to the central bank’s interest-rate policies.

In response to the deep recession brought on when the virus struck with force in March, the Fed slashed its key interest rate to a record low and began buying billions of dollars in Treasury bonds and mortgage-backed securities to put downward pressure on long-term rates.

The Fed is expected to maintain its ultra-low interest rates over the next three years. But it may also decide as soon as this month’s meeting to expand the support it is providing through its bond purchases, especially if Congress is unable to pass further economic relief legislation in the lame-duck session.

At a congressional hearing Wednesday, Fed Chairman Jerome Powell said that increased support from Congress is needed as a bridge between the current economic troubles and the time next year when a virus vaccine is expected to be widely available.

The new Fed survey said that while employment increased during November, the pace of job gains was slow at best.

Many of the Fed’s business “contacts noted that the sharp rise in Covid-19 cases had precipitated more school and plant closings and renewed fears of infection, which have further aggravated labour supply problems,” the report said. “Providing for childcare and virtual schooling needs was widely cited as a significant and growing issue for the workforce, especially for women.”

The Fed survey said that the staffing issues had prompted some companies to extend greater accommodations for flexible work schedules.

The Philadelphia district reported that sharply rising COVID-19 cases in November had “heightened concerns over anticipated layoffs, foreclosures, evictions and bankruptcies.”

The Fed’s St. Louis regional bank, meanwhile, reported that conditions had deteriorated toward the end of November, while the Minneapolis region reported a softening in consumer demand due to rising virus infections.

The Dallas district said that energy activity remained depressed and business prospects were “highly uncertain due to looming concerns surrounding political uncertainty and the unknown course of the pandemic.”

Martin Crutsinger, The Associated Press

economy

Just Posted

Alberta has made a more detailed framework for those looking to acquire an exemption to the mandatory indoor mask bylaw. (AP Photo/Eric Gay, File)
Alberta changes requirements for mask exemptions

Masks wearing has been recommended for almost a year and provincially mandated… Continue reading

Alberta’a chief medical officer of health Dr. Deena Hinshaw said Thursday that there are more than 328,000 vaccine appointments booked over the next seven days. (Photo by Chris Schwarz/Government of Alberta)
Alberta surpasses 2 million doses administered of COVID-19 vaccine

Red Deer down to 835 active cases of COVID-19

RCMP file photo (Photo by Jeff Stokoe/Advocate staff)
RCMP investigating shooting near Maskwacis

Maskwacis and Wetaskiwin RCMP are seeking public assistance after a shooting has… Continue reading

Rode
Smith among impressive group of RDC soccer Queens recruits

There have been a number of cases where younger girls have developed… Continue reading

Red Deer Public Schools is projecting a $4-million budget deficit for 2021-22 school year. (AP Photo/Gregory Bull)
Red Deer Public Schools prepares $124-million budget

$1 million COVID recovery plan to assist students

Bo’s Bar and Grill owner Brennen Wowk said the hospitality industry is looking for more clarity from the province around what conditions must be met to allow for restaurants reopening. (Advocate file photo)
Frustated restaurant owners want to know government’s reopening plan

Restaurant owners feel they are in lockdown limbo

Vancouver Canucks' Nils Hoglander, right, is checked by Calgary Flames goalie Jacob Markstrom during third-period NHL hockey action in Calgary, Thursday, May 13, 2021.THE CANADIAN PRESS/Jeff McIntosh
Lindholm, Tkachuk lead Calgary Flames in 4-1 win over Vancouver Canucks

Lindholm, Tkachuk lead Calgary Flames in 4-1 win over Vancouver Canucks

Chicago Bulls guard Zach LaVine, right, drives to the basket against Toronto Raptors center Khem Birch, left, and guard Jalen Harris during the first half of an NBA basketball game in Chicago, Thursday, May 13, 2021. (AP Photo/Nam Y. Huh)
LaVine, Markkanen lead Bulls past Raptors, 114-102

LaVine, Markkanen lead Bulls past Raptors, 114-102

NFL schedules get off to strong starts with Week 1 twinbills

NFL schedules get off to strong starts with Week 1 twinbills

The Saddledome, home of the Calgary Flames, is shown in Calgary, Thursday, March 12, 2020. The final three games of Canada's Secret Cup women's hockey tournament will be played in Calgary's NHL arena.THE CANADIAN PRESS/Jeff McIntosh
Secret Cup women’s tournament final games to be held in Calgary’s Saddledome

Secret Cup women’s tournament final games to be held in Calgary’s Saddledome

FILE - In this Thursday, July 18, 2019 file photo, Ron Francis talks to reporters in Seattle after he was introduced as the first general manager for Seattle's yet-to-be-named NHL hockey expansion team. Four years since George McPhee was a “puppet master” of the NHL leading up to the Vegas expansion draft, general managers approached this trade deadline with Seattle’s upcoming addition to the league in mind. While Kraken GM Ron Francis prepares – and maybe made a handshake deal or two already like McPhee did – Seattle was on his colleagues’ minds.(AP Photo/Ted S. Warren, File)
Kraken still plan to hire coach before expansion draft

Kraken still plan to hire coach before expansion draft

Alberta Premier Jason Kenney attends a news conference in Calgary on Tuesday, Sept. 15, 2020. Simmering internal discontent in his United Conservative caucus has boiled over into an open challenge to his leadership. THE CANADIAN PRESS/Todd Korol
Two Alberta UCP members kicked out of caucus after challenging Kenney’s leadership

Two Alberta UCP members kicked out of caucus after challenging Kenney’s leadership

Toronto Blue Jays' Lourdes Gurriel Jr. (13) celebrates in the outfield at the end of a baseball game against the Atlanta Braves Thursday, May 13, 2021, in Atlanta. (AP Photo/Ben Margot)
Bichette, Blue Jays rally again to beat Braves 8-4

Bichette, Blue Jays rally again to beat Braves 8-4

FILE - Jordan Spieth waits his turn to putt during the third round of the Valero Texas Open golf tournament in San Antonio, in this Saturday, April 3, 2021, file photo. Spieth will try to complete the career Grand Slam next week at the PGA Championship. (AP Photo/Michael Thomas, File)
Momentum for McIlroy, few others going into PGA Championship

Momentum for McIlroy, few others going into PGA Championship

Most Read