The Fed published the May issue of the “Beige Book” report, which includes assessments of the current situation in the American economy.

In the report, which was prepared with the analysis of the 12 branches of the bank, it was stated that the economic activity in the country changed “very little” in April and early May, and it was noted that four regions reported small increases in economic activity, two regions reported mild to moderate decreases, while six regions remained unchanged.

The report pointed out that future growth prospects have deteriorated somewhat, but major expansion in activity is expected, with consumer spending stable or higher in most regions, with increases in entertainment and accommodation spending.

In the report, it was stated that the manufacturing activity in most regions is moving from horizontal to upwards and supply chain problems continue to develop, and the demand for transportation services has also decreased.

The report said residential real estate activity increased, while commercial construction and real estate activity declined overall, although low inventories remained in most regions.

Stating that financial conditions are stable or slightly tighter in most regions, it was noted that an increase in consumer loan defaults was reported from several regions, approaching pre-pandemic levels.

The report highlighted that high inflation and the end of COVID-19 benefits continue to strain the budgets of low- and middle-income households, increasing demand for social services, including food and shelter.


Price growth rates slowed in many regions

The report noted that employment increased in most regions, albeit at a slower pace than previous reports, and that overall, the labor market remains strong, with respondents reporting difficulties in finding workers in industries with varying skill levels.

On the other hand, it was stated in the report that some relevant people stated that they had paused hiring or reduced staff numbers due to weak actual or potential demand and greater uncertainty about the economic outlook. As in the previous report, it was noted that wages increased moderately.

It was noted in the report that prices also increased moderately, but the rate of increase in prices slowed down in many regions.

The report said consumer prices continued to rise due to solid demand and rising costs, but some regions noted that consumers were more price sensitive than in the previous report.

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