Beige Book: Ongoing uncertainty and volatility leads to remaining pessimism on overall outlook
Economic activity grew “moderately” in most districts of the country and while there is a majority of optimistic beliefs about the overall outlook, pessimistic thoughts remain for some, according to the Federal Reserve’s Beige Book, released on Wednesday.
The pessimism stems from “continued uncertainty and volatility” related to the COVID-19 pandemic, and its “negative effect on consumer and business activity,” was a common sentiment from all the districts across the country.
Although gains were reported by most districts, they were “modest” and still far behind from February figures.
Consumer spending “continued to pick up,” fueled by solid sales of vehicles as well as progress in the tourism and retail sectors.
There was also good news in regard to manufacturing, which climbed in most districts and more activity at ports and residential construction was a positive note as it grew and demonstrated resiliency, while residential real estate sales grew with prices still trending up, following demand and being coupled with low inventory.
However, most districts did add that there was a “slowing pace” of growth in those areas, as total spending was still way off from where it was in February.
Commercial construction plummeted and commercial real estate was still contracting. Conditions in the agricultural industry was still suffering from little prices and the activity of energy was muted at short levels and small expectations of gains in the near-term for both.
ADP employment report
Total nonfarm private employment increased by 428,000 in August, after climbing by 167,000 in July, according to ADP on Wednesday.
Economists polled by IFR Markets expected 900,000 million of jobs added.
“The August job postings demonstrate a slow recovery,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute. “Job gains are minimal, and businesses across all sizes and sectors have yet to come close to their pre-COVID-19 employment levels.”
Factory orders grew 6.4% in July after gaining 6.4% in June, according to the Commerce Department.
Economists polled by IFR Markets projected an increase of 6.0%.
New orders excluding transportation rose 2.2% after a 4.8% gain a month earlier.