US economic growth is stagnating

According to a report by the US Federal Reserve, the US economy grew at a moderate pace at the end of last year. According to the economic report published on Wednesday (the Beige Book), growth will be affected due to persistent problems in supply chains.

In addition, there is a shortage of workers. At the beginning of December, the Fed reported moderate to moderate growth. Despite the rapid spread of the omicron variant of the coronavirus, consumer spending continued to grow. However, most regions reported a sudden drop in travel and hotel reservations. Companies are generally optimistic. However, trust has eroded in some areas.

The report says labor shortages are driving up wages. The prices companies pass on to customers have continued to rise—albeit at a somewhat slower pace.

The Federal Reserve is currently under pressure from rising inflation. In December, the inflation rate was 7.0 percent, the highest rate since 1982. The Fed aims for a rate of just two percent. So it wants to exit its bond purchases by March to support the economy. Some Fed members have already indicated an initial rate hike for March.

The latest economic report has been prepared by the Kansas City Regional Central Bank. Refers to economic development up to January 3rd. The report is based on the Federal Reserve’s economic communications surveys. (sda/dpa)