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As U.S. Reopens, Employees in No Rush to Return to Work, Beige Book Shows

EconomyMay 27, 2020 02:38PM ET
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© Reuters.

By Yasin Ebrahim 

Investing.com – Economic activity declined across the U.S. in recent weeks and the road to recovery in the labor market could take longer as generous unemployment benefits and concerns about infections are keeping employees at home, a Federal Reserve survey showed.

The central bank’s Beige Book economic report, based on anecdotal information collected by the Fed’s 12 reserve banks through May 18, underscored the impact of the pandemic on the economy as consumer spending and employment continued to decline.

"Economic activity declined in all districts – falling sharply in most – reflecting disruptions associated with the Covid-19 pandemic," the report showed. "Consumer spending fell further as mandated closures of retail establishments remained largely in place during most of the survey period. Declines were especially severe in the leisure and hospitality sector, with very little activity at travel and tourism businesses."

In a blow to hopes that the labor market may bounce back sooner rather than later, contacts cited challenges in "bringing employees back to work, including workers' health concerns, limited access to childcare, and generous unemployment insurance benefits."

The disinflationary pressure, meanwhile, showed no sign of abating amid weak demand pressuring selling prices for apparel, hotel rooms, and airfare, though supply chain disruptions and strong demand led to higher prices for some grocery items including meat and fresh fruit.

In New York, the epicenter of the pandemic, the regional economy continued to contract since the last report, though there were "scattered signs of a pickup" in early May, the report showed.

"Businesses reported widespread layoffs and flat to declining wages, but the vast majority of separations were deemed temporary. Prices paid rose slightly, while selling prices edged down. Leisure & hospitality and retail trade have remained the most severely affected. Financial firms reported weaker activity."

As U.S. Reopens, Employees in No Rush to Return to Work, Beige Book Shows
 

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Comments (5)
Michael King
Michael King May 27, 2020 3:47PM ET
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As I posted a month back. There is no reason for people to go back to work if they can collect unemployment and COVID compensation. Plus, it would be very risky to go back to work at the time as there is no effective treatment on COVID yet. Known consequence of COVID include heart, lung, kidney... failure. Basically even cured from COVID, the person would still be handicapped due to badly damaged heart, lung, kidney ....
Matt Butler
Buywall May 27, 2020 3:05PM ET
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and yet we kept hearing how eager everyone was to get back to work. "work" *****
Kel dawg
Kel dawg May 27, 2020 2:57PM ET
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this is what happen when you give free money too much free money in unemployment. They are hoping the government will keep giving the free checks so why bother working.. with the boost in unemployment check, they are happy as ***and not worry about work anymore till they are force too.. then they will demonstrate complaining there is no job and demand more free money
maga king
maga king May 27, 2020 2:52PM ET
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fire all these leeches
Muhamed Jaffir
Muhamed Jaffir May 27, 2020 2:41PM ET
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you paid dishwashers at restaurants $1200 a week in benefits. they probably think they hit the lotto.
 
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