Fed’s Beige Book: Supply chain roars and labor shortage slows economic growth

U.S. economic growth slowed as a result of supply chain disruptions and a growing labor shortage according to a fresh Federal Reserve report.

Fed’s Beige Book is a region by region compilation of economic information. In its latest edition issued Wednesday, Fed reported that several districts noted that growth overall had cooled during the September through October period that the report covers.

Price pressures also stemmed from increased transportation and labor constraints, the Fed said, with the cost of steel, electronic components and freight rising rapidly.

“Several districts noted that the pace of growth slowed this period, constrained by supply chain disruptions, labor shortages, and uncertainty around the delta variant of COVID-19″, the Fed said. These factors impacted the slow recovery from the coronavirus pandemic,

The Beige Book also indicated that significantly elevated prices” across most districts, an increase fueled by rising demand for consumer goods and raw materials.

Cost increases were widespread across industries and were largely driven by product scarcity and supply chain disruptions.

“Expectations for future price growth varied with some expecting price to remain high or increase further while others expected prices to moderate over the next 12 months,” the report said.