U.S. Economy Grew Moderately Amid Omicron Surge, Fed Says
March 2, 2022
The U.S. economy grew at a modest to moderate pace during the period from mid-January to early February, despite the Omicron variant causing business disruptions and a pullback in consumer spending, according to the Federal Reserve’s latest Beige Book.
The Beige Book, a periodic compilation of business anecdotes from across the country, found that the surge of covid cases dealt a setback to the economic recovery in the early part of the year.
Demand for workers remained high and businesses expressed ongoing troubles in hiring workers, which was exacerbated by the surge in Covid case numbers. Millions of workers called in sick in January, and businesses also cited extreme winter weather as a major disruption. Still, the Beige Book notes that “workers and firms recovered more quickly than during previous waves.”
Many businesses reported that they have robustly increased the prices they charge consumers, due mainly to rising transportation costs, the increased cost of labor, and material shortages. These businesses said they expect consumer prices to continue climbing over the next several months.
Companies also stated that they have already raised or plan to raise wages, particularly for lower-wage workers, but they expect wage inflation to plateau later in the year.