Tuesday, February 27, 2024

The Fed sees companies’ optimism about US economic growth

American companies’ expectations about future growth have been good or improved in recent months, even though high-interest rates have limited activity in sectors such as auto sales, the Federal Reserve (Fed) on Thursday.

The American economy has “barely changed or unchanged” since November, as stated this Wednesday by the United States Federal Reserve (Fed) in its Beige Book, a document that provides a detailed economic evaluation of the 12 regional central banks of the country. The North American issuing institute indicated that in these regions, all show relative stagnation, minus four, of which three reported “moderate” growth and one a “moderate” decline.

According to the document, consumers get “some seasonal relief” during the holidays, meet expectations in most districts, and exceed them in three of them. For their part, several districts reported an increase in recreational trips. The negative side was announced by the industry because it reduced their activity level. Regions continue to report that high interest rates have limited car sales and real estate transactions. However, many contacts from various sectors cited the prospect of lower interest rates as a “source of optimism.”

Conversely, concerns about the office market, weakening global demand, and the 2024 political cycle were cited as sources of economic uncertainty. Overall, most districts indicated that their companies’ expectations for future growth were positive, increasing, or both.

EMPLOYMENT

Seven districts described “little or no” change in overall employment levels, while its growth rate is described as “moderate to moderate” in four. Two districts continue to see a “tight” labor market, with some describing recruitment difficulties for companies seeking specialized skills. However, nearly all districts cited one or more signs of a cooling labor market, such as a greater number of candidates, lower turnover rates, a more selective hiring company, and a reduction in wage pressures. After all, businesses in many districts expect wage pressures to ease and wage growth to continue to fall next year.

Prices

In terms of price, six districts reported “slight or moderate” increases, and two reported “moderate” increases. Five districts also reported that overall price growth has slowed somewhat compared to the previous period, while the other three showed no “significant” change in price pressure.

Companies in most regions explained that input values ​​remained “stable or declining,” especially in industry and construction. It is also recorded that a greater consumer sensitivity to prices forces retailers to reduce their profits and, in turn, face the efforts of their suppliers to raise them.

Rising injury and illness insurance premiums continue to affect most companies. Three districts said their companies expect price increases to be more contained next year, while four companies expect little change.

World Nation News Desk
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