US Reports Sudden Drop In Leisure, Hospitality Spending Over Omicron

According to the Fed’s Beige Book, a report on current economic conditions in each of the 12 Federal districts, most districts experienced a sudden pullback in leisure and travel spending, as well as hotel occupancy and patronage at restaurants as the number of Covid-19 Omicron infections rose.

Additional Takeaways:
“Contacts from many districts indicated growth continued to be constrained by ongoing supply chain disruptions and labour shortages.”

“Despite the modest pace of growth, demand for materials and inputs, and demand for workers, remained elevated among businesses.”

“Economic activity across the united states expanded at a modest pace in the final weeks of 2021.”

“Consumer spending continued to grow at a steady pace ahead of the rapid spread of the Omicron Covid-19 variant.”

“Although optimism remained high generally, several districts cited reports from businesses that expectations for growth over the next several months cooled somewhat during the last few weeks.”


“The manufacturing sector continued to expand nationally, with some regional differences in the pace of growth.”

“Contacts from most federal reserve districts reported solid growth in prices charged to customers, but some also noted that price increases had decelerated a bit from the robust pace experienced in recent months.”

“Wholesale and materials prices contributed to pricing pressures across a wide range of industries, spanning service providers and goods producers.”

“Job openings were up but overall payroll growth was constrained by persistent labour shortages.”

“Employment grew modestly in recent weeks, but contacts from most districts reported that demand for additional workers remains strong.”

“Many contacts attributed the high cost of inputs to ongoing supply chain disruptions.”

“Some districts reported that transportation bottlenecks had stabilized in recent weeks, though procurement costs remained elevated.”

“Ongoing labour shortages and associated wage growth also added cost pressures to businesses.”

“Tightness in labour markets drove robust wage growth nationwide, with some districts highlighting additional growth in labour costs associated with non-wage benefits.”

“Many contacts noted that wage gains among low-skill workers were particularly strong.”

“Compensation growth remained well above historical averages across industries, across worker demographics, and across geographies.”