A ‘robust’ U.S. economy is strengthening, Fed’s Beige Book finds, but it’s also grappling with big shortages and higher inflation

The outlook: The Federal Reserve’s latest deep dive on the economy confirmed the obvious: The U.S. is growing faster, but the recovery is being restrained by widespread shortages of labor and supplies.

“The U.S. economy strengthened further from late May to early July, displaying moderate to robust growth,” the Beige Book said.The biggest problem for the economy right now is the inability of businesses to keep up with the crush of demand. They can’t get enough supplies on time or hire enough people to fill a record number of job openings despite still-high unemployment.

The Fed has insisted for months that the surge in inflation is a temporary phenomenon tied to the reopening of the economy, but Powell acknowledged on Wednesday that prices have risen more than the central bank expected. “The outlook for demand improved further, but many contacts expressed uncertainty or pessimism over the easing of supply constraints,” the survey said.

Are you telling me people are realizing it’s not worth working for the extra money if prices of everything keep going up?

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