[ad_1]
Labor shortages and supply chain disruptions are hampering companies across the country as the economic recovery from the coronavirus crisis accelerates.
The pace of the rise increased in April and May, as consumer spending rebounded along with higher vaccination rates and lighter social distancing measures, according to the Federal Reserve’s Beige Book report, which provides anecdotal evidence gathered by the central bank’s regional counterparts on the health of the world’s largest economy.
On some occasions, companies struggled to meet this demand, even though they had difficulty obtaining materials and workers.
“Manufacturers reported that widespread shortage of materials and labor, along with delays in delivery, made it difficult for customers to obtain products,” the report said. “Similar challenges persisted in construction. Home builders often observed that strong demand, driven by low mortgage interest rates, exceeded their building capacity, leading some to limit sales.
The shortage of manpower was also widespread, with almost all districts represented in the report pointing to an impact on hiring and wider labor gains.
“It was difficult for many companies to hire new workers, especially hourly workers with low wages, truck drivers and skilled traders,” he said. “The lack of job candidates prevented some companies from increasing production and, less frequently, caused some companies to reduce their operating hours.”
While the report noted that a “growing number” of firms offered benefits, including higher firm premiums and starting salaries to cover positions, wage growth overall was “moderate”.
“Contacts expected labor demand to remain strong, but supply restricted in the coming months,” the report added.
The Beige Book was published at a critical juncture for the U.S. economy and its top policymakers, as concerns grow that recent inflationary pressures may be more persistent than many expect.
Wednesday’s report acknowledged that costs have risen broadly, with the sharpest gains in raw materials for construction and manufacturing in particular.
“Strengthening demand, however, allowed some companies, particularly manufacturers, builders and transportation companies, to pass on much of the cost increases to their customers,” the report said. “Looking to the future, contacts are expected to increase costs and charge higher prices in the coming months.”
[ad_2]
Source link
