Home Business News Fed said the speed of US economic recovery accelerated

Fed said the speed of US economic recovery accelerated


© Reuters. FILE PHOTO: The building of the Federal Reserve Council on Constitution Avenue was taken in Washington

By Jonnelle Marte, Ann Saphir and Howard Schneider

(Reuters) – The US economic recovery accelerated at a moderate pace from late February to early April as consumers, fueled by increased COVID-19 vaccinations and financial support strongly, open their wallets to spend more on travel and other items, the Federal Reserve said on Wednesday.

The labor market, already ravaged by the coronavirus epidemic, also improved as more people returned to work, with hiring rates rising highest in the manufacturing, construction, entertainment and guest sectors. hotel.

“More optimistic tourism reports, underpinned by an increase in demand for leisure and tourism activities for which the links are attributed to the spring break, the relaxation of related restrictions. to pandemic, recent boosting immunizations and stimulus payments among other factors, “the US central bank said in its latest” Beige Book “, a collection of Anecdotes about the economy from its 12 regional districts.

Hotel contacts told the Atlanta Fed they had “solid bookings during the remainder of the spring and through the summer months and beyond,” according to a report compiled by the Dallas Fed by The survey was conducted before April 5.

While most counties said their regional economies’ growth rates were moderate, the New York Fed said their economies “grew at a strong rate for the first time during the pandemic. , with widespread growth across industries. ”

The improvement comes despite an increase in COVID-19 cases in the region, the New York Fed said. “Moreover, business relationships are increasingly optimistic about the short-term outlook.”

Beige book changing the tune https://graphics.reuters.com/USA-FED/BEIGE/oakperwdavr/chart.png

FOCUS ON WAGES

Fed Chairman Jerome Powell this week said the US economy is at a “inflection point”, where growth and recruitment could accelerate in the coming months thanks to increased COVID-19 vaccination and strong fiscal stimulus.

According to data from the Department of Labor, the United States added 916,000 jobs in March, the largest increase in 7 months. And US consumer prices rose the fastest in more than 8-1 / 2 years in March as vaccinations and stimulus boosted economic activity, according to Labor Department data released Tuesday.

However, Powell and other Fed officials say brighter economic forecasts and short-term higher inflation will not affect monetary policy and the central bank will hold on to support until the crisis is over. The US economy still lacks 8.4 million jobs compared to pre-pandemic levels.

Policymakers last month agreed to close to zero interest rates and continued to buy $ 120 billion in bonds per month until there was “further significant progress” on Fed targets of do and inflation max. Fed officials will regroup after two weeks for their next policy-setting meeting.

The report highlights strategies some firms are considering as they reopen, increase capacity and hiring efforts. A HR services company told Fed Cleveland that wages became a top priority for job seekers for the first time, surpassing the type of job.

Some contacts with the workforce have suggested that employers may postpone wage increases in hopes of having a large number of newly vaccinated job seekers, Fed Minneapolis reports: “Why start wage increases When more workers can return? “



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