State of the economy against the backdrop of the pandemic

Economic growth in recent weeks has been minimal or zero in 4 of the 12 US districts against the backdrop of a second wave of coronavirus, the Federal Reserve reported on Wednesday in its Beige Book, a regular state of the economy report.

In Philadelphia County and much of the Midwest, "activity began to slow down in early November as COVID-19 cases increased", the report said.

The situation in some sectors, including manufacturing, was more favorable than others, but stress signals began to come in more frequently.

"Contacts in the banking sector in many districts are showing some deterioration in loan quality", said officials from the Federal Reserve, and "late payment expectations have become more common in 2021".

Many respondents expressed concern about the new wave of the pandemic, the already introduced and potential restrictive measures, as well as the imminent termination of unemployment benefits payments and the end of the moratorium on eviction of mortgage defaulters and deprivation of the right of borrowers to repurchase mortgaged property.

There is an uneven picture on the labour market. For example, plant managers cannot find qualified employees to meet the growing demand for goods, while restaurants and hotels continue to experience reduced labour requirements due to the pandemic, according to the Beige Book.

"Expanding firms continue to note difficulties in attracting and retaining employees", the report says. However, the work process is increasingly affected by the transfer of children to home schooling, especially for female workers.

The survey was conducted by the Philadelphia Federal District from mid-October to November 20. The beige book is usually published about two weeks before the Federal Reserve meeting. The next meeting of the Federal Open Market Committee (FOMC) will be on 15-16 December.