Fed: US Economy Remains Below Pre-COVID-19 Levels

Economic activity in the United States increased in almost all districts, but remained well below where it was prior to the COVID-19 pandemic, according to the US Federal Reserve’s Beige Book, issued on Wednesday.

“Consumer spending picked up as many nonessential businesses were allowed to reopen.”

“Retail sales rose in all Districts, led by a rebound in vehicle sales and sustained growth in the food and beverage and home improvement sectors.”

“Leisure and hospitality spending improved, but was far below year-ago levels.”

In addition, manufacturing activity expanded, but from a very low level, while demand for professional and business services increased in most districts, but was still weak, the report noted.

Transportation activity rose overall on higher truck and air cargo volumes, while construction remained subdued

The report further noted that home sales increased moderately, but commercial real estate activity stayed at a low level.

“Financial conditions in the agriculture sector continued to be poor, while energy sector activity fell further because of limited demand and oversupply. Loan demand was flat outside of some Paycheck Protection Program (PPP) activity and increased residential mortgages.”

Employment increased on net in almost all districts as many businesses reopened or ramped up activity, however, job turnover rates remained high.

Meanwhile, prices were little changed overall, according to the Beige Book July report.