While economic activity gained in nearly all districts, it hasn’t come close to pre-pandemic levels, according to the Federal Reserve’s Beige Book, released Wednesday.
“Outlooks remained highly uncertain, as contacts grappled with how long the COVID-19 pandemic would continue and the magnitude of its economic implications,” according to the release.
Employment improved in nearly all districts as states allowed businesses to reopen.
“Contacts in nearly every district noted difficulty in bringing back workers because of health and safety concerns, childcare needs, and generous unemployment insurance benefits,” the report said. “Many contacts who have been retaining workers with help from the PPP said that going forward, the strength of demand would determine whether they can avoid layoffs.”
Consumer spending also rebounded with the reopening. Retail sales gained, with vehicle sales, the food and beverage sector and home improvement leading the way, according to the report.
Empire State Manufacturing
Business activity showed expansion in New York state in July for the first time since February, according to the Empire State Manufacturing Survey, released Wednesday by the Federal Reserve Bank of New York.
The general business conditions index reversed to positive 17.2 in July from negative 0.2 in June.
Economists surveyed by IFR Markets expected the index would be positive 9.25.
The new orders index climbed to positive 13.9 from negative 0.6, while the shipments index grew to 18.5 from 3.3. Unfilled orders narrowed to negative 0.6 from negative 12.5, the Fed said.
The delivery time index rose to 2.6 from 1.3, while the inventories index dropped to negative 9.7 from negative 0.6 in the prior survey. The prices paid index slipped to 14.9 from 16.9, while the prices received index slid to negative 4.5 from negative 0.6. The number of employees index rose positive 0.4 from negative 3.5, while the average employee workweek index narrowed to negative 2.6 from negative 12.0, the Fed reported.
Looking six months into the future, the general business conditions index showed respondents are less optimistic than they were a month ago, as it fell to 38.4 from 56.5 last month. The new orders index dropped to 41.9 from 52.9, while the shipments index decreased to 39.4 from 53.1, and unfilled orders fell to 0.6 from 1.9 the Fed said. The delivery time index gained to 3.2 from 0.6, while the inventories index moved up to zero from negative 5.6.
The future prices paid index grew to 28.6 from 25.6, while the prices received index rose to 10.4 from 7.5. The number of employees index climbed to 21.1 from 19.0, while the average employee workweek index slipped to 3.9 from 5.0, the Fed reported. The capital expenditures index increased to 9.1 from 3.1. The technology spending index rose to 8.4 from 6.3.
Import and export prices
Import prices jumped 1.4% in June, after a 0.8% increase in May, the Labor Department reported Wednesday.
Economists anticipated imports to gain 1.0%.
Export prices soared 1.4% in June — the biggest rise since a 1.5% jump in March 2011 — after rising 0.4% the prior month. Economists estimated exports to increase 0.8%.
Industrial production increased 5.4% in June after a 1.4% gain in May, but remains 10.9% below February levels, according to the Fed.
Economists expected an increase of 4.4%.
Capacity utilization gained to 68.6% in June from 65.1 in May.
Economists predicted a 67.6% level.