Sudy Gervais, right, talks with Lee Kessler, the owner of the Barracuda Taphouse & Grill, left, about a potential job at a job fair featuring local businesses in the Coconut Grove neighborhood of Miami, Wednesday, Sept. 8, 2021. U.S. economic activity “downshifted” in July and August due to rising concerns about COVID's delta variant, as well as supply chain problems and labor shortages, the Federal Reserve’s latest survey of the nation's business conditions revealed. WASHINGTON — U.
“Economic growth downshifted slightly to a moderate pace in early July through August,” the report, known as the Beige Book, said. It was based on interviews done by the Fed's 12 regional banks and completed by Aug. 30. It will be used in discussions when Fed officials hold their next interest rate meeting on Sept. 21-22.
Chris Zaccarelli, chief investment officer for Independent Advisor Alliance, said he expected the weaker August jobs report would cause the Fed to “slightly delay the timeline” for reducing its monthly bond purchases. Many economists believe the announcement will now come at either the Fed's November or December meetings.
The persistent and extensive labor shortages led to wage increases, including in all of the Fed's Midwest and Western districts, the Fed found. “Most districts noted substantial escalation in the cost of metals and metal-based products, freight and transportation services and construction materials,” the Fed said.