The Federal Reserve Bank of Atlanta is reporting that economic
activity continued to expand at a modest pace from mid-November through
December in its district, which includes the states of Alabama, Florida, and
Georgia, and portions of Louisiana, Mississippi, and Tennessee.
The bank, headquartered in Atlanta, reported that over
the period of mid-November through December:
- Labor markets continued to gradually improve
- Wage pressures were muted
- Nonlabor costs related to construction and supply chains were rising
- Sales at auto dealers declined
- Tourism and hospitality activity softened
- Residential real estate demand remained strong
- Residential mortgages showed an uptick in delinquencies
- Commercial real estate markets remained soft
- Manufacturing activity rose modestly
- Banking conditions were stable
Labor conditions
Consistent with the findings of the U.S. Bureau of Labor Statistics, the Atlanta Fed found that overall employment levels had risen over the past months, although they stayed below the levels reached a year ago.
Labor shortages were faced by trucking companies, while manufacturers and technology companies were reporting increased hiring. At the same time, some restaurants reported that they were layoff staff. Professional and business services firms were reluctant to hire even with increased business because they were uncertain about future business, as the coronavirus impacts the overall economy.
Prices
The Atlanta Fed found moderate price inflation since its last report. Both manufacturing and service sector firms saw price inflation for their goods and services. Service sector firms reported high prices for their inputs but slowed slightly for manufacturers.
Inflation of prices paid outpaced that of prices received, according to firms. Prices rose for raw materials and longer lead times were required, particularly for materials used in construction. Some firms reported higher costs for personal protective equipment, also related to the coronavirus epidemic.
These comments and others are provided by the Federal Reserve Bank of Atlanta as its contribution to the Federal Reserve’s Summary of Commentary on Current Economic Conditions by Federal Reserve District, commonly known as the “Beige Book”.
The report is published eight times a year in advance of Federal
Open Market Committee meetings. The FOMC makes decisions about interest rates
and the growth of the U.S. money supply. The first meeting of 2021 will occur
January 26-27, 2021.
