The U.S. economy grew modestly over the summer but remained well below its pre-pandemic level of activity, a Federal Reserve report said Wednesday.
The report painted a picture of an economy moving on multiple tracks. Some industries—such as residential construction and real estate, auto sales or manufacturing—saw pent-up customer demand return as coronavirus-related lockdowns eased. One Boston furniture retailer reported sales were running 30% above last summer.
But others—notably commercial real estate, restaurants and tourism—continued to struggle, the report said. An airport in southern California said it was receiving only 9% of its regular number of domestic travelers and international arrivals had almost completely stopped.
The report, known as the Beige Book, is a collection of anecdotes from business contacts around the country.
Overall, firms said they were modestly optimistic but they also pointed to areas of concern. “Continued uncertainty and volatility related to the pandemic, and its negative effect on consumer and business activity, was a theme echoed across the country,” the report said.
The Fed also found signs of an emerging labor shortage, despite elevated unemployment rates and historically high filings for jobless benefits. In particular, a lack of child care options and concerns over the impending start of remote classes in the new school year has kept many potential workers at home, the report found.
In the Philadelphia area, for instance, staffing agencies couldn’t fill their orders for workers “and they worried—as the school year neared—that childcare issues will further reduce the labor supply.”
In the Atlanta region, “many employers also expressed growing concern about workers’ abilities to balance workloads with the demands of childcare and a return to school or virtual learning environments,” the report said.
Some employers also said extended unemployment benefits kept workers away since they earned more from the benefits than on the job. The weekly $600 additional benefits expired at the end of July.
A peach farmer in the St. Louis region said he had raised pay by 10% but still had to leave part of his crop unharvested, the report said.
Write to David Harrison at [email protected]
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Appeared in the September 3, 2020, print edition as ‘Fed Report Notes Modest Growth.’