As the economic recovery from the coronavirus crisis accelerates, labor shortages and supply chain disruptions are hampering businesses across the country.
According to the Fed’s Beige Book report, with consumer spending rebounding as vaccination rates increased and social distancing measures eased, the pace of recovery accelerated in April and May. Health compiled by peer regional central banks guide stories. One of the largest economies in the world.
However, due to the difficulty of procuring materials and labor, in some cases it is difficult for companies to meet this demand.
The report stated: “Manufacturers have reported that widespread shortages of materials and labor and delays in delivery make it difficult to deliver products to customers.” Similar construction challenges remain. Homebuilders often notice that low mortgage rates driven by high demand have outpaced their ability to build, causing some people to restrict sales.”
Labor shortages are also widespread, and nearly all regions in the report highlight the impact on employment and broader employment growth.
“Many companies still have difficulty recruiting new workers, especially low-wage workers, truck drivers and skilled entrepreneurs,” he said. “The lack of job seekers prevents some companies from increasing production and, in fewer cases, causes some companies to reduce working hours.”
And while the report noted that “more and more” companies are offering perks including signing bonuses and higher starting salaries to cover job openings, overall wage growth is “modest.”
“Contacts expect labor demand to remain strong in the coming months, but supply will be limited,” the report adds.
The “Beige Book” was published at a critical time for the US economy and its leading policy makers as there is growing concern that recent inflationary pressures may be more persistent than many had anticipated.
Wednesday’s report acknowledged that costs had increased “on the whole,” particularly in building and producing raw materials.
“However, increasing demand is allowing some companies, especially manufacturers, builders and carriers, to pass on most of the cost increase to customers,” the report states. months. The problem of charging higher prices.