Fed survey finds economy growing modestly despite COVID

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The Federal Reserve says the economy was growing at a modest pace in late 2021, but was still being held back by supply-chain disruptions and labor shortages.

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WASHINGTON – The Federal Reserve said on Wednesday that the economy was growing at a modest pace at the end of 2021, but was still being held back by supply-chain disruptions and labor shortages.

In its latest survey of business conditions across the country, the Fed said 12 of its regional banks found the economy was growing steadily. But several regions reported a sudden reduction in spending on leisure travel, hotels and restaurants due to the rapid spread of the Omicron version of the coronavirus.

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“While optimism remained generally high, several districts cited reports from businesses that growth expectations over the next several months cooled somewhat during the last few weeks of 2021”, a period when COVID cases are rising rapidly. were growing.

The Fed survey, known as the Beige Book, will form the basis of discussion when the central bank holds its next meeting on January 25-26.

At the Fed’s last meeting in December, Powell said the central bank was ramping up its efforts to strengthen credit, with the goal of stopping inflation before rising prices. His remarks come at a time when American households are under pressure from rising prices of food, gas, rent and many other items.

The government reported on Wednesday that consumer prices have risen 7% over the past 12 months, the fastest pace since 1982.

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