As per the Federal Reserve, the US economy is showing the signs of recovery. It looks like jobs and spending is on the rise.
As we all know, the US economy is facing some challenges of late. However, according to the Latest Survey By The Federal Reserve, the US economy has lots to cheer as it kept expanding throughout February and March. This has happened despite the slowdown in exports and weakness in the energy sector. The situation with the exports was because of the strong dollar ad global weakness. Farm products and factory products were mainly affected by the scenario.
Increase in wages and spending
According to the latest survey by the Fed, there are many positive signs. They surveyed the business conditions in 12 districts mainly. According to them, consumer spending has witnessed a modest growth. Except for Atlanta, wages and spending showed a growth. The Great Recession has had a negative impact on the wage growth. However, we are finally seeing the signs of a recovery from the Great Recession. It is important to Understand The Factors That Affect The US Market Trends – Click Here For More Information.
The Beige Book
The survey has an official name and it is called ‘The Beige Book’. They will be considering the survey findings at the next Fed meeting, which is scheduled for April 26-27. What to expect in the coming days? Let’s take a look below.
- Economists believe that the Fed is less likely to change its benchmark policy rate. The rate is supposed to stay in the 0.25% to 0.5% range. The rate was kept at the near zero level for close to seven years before the Fed finally increased it in last December.
- The rates were kept unchanged in January-March. They wanted to see the effect of global slowdown before they change it. As we all know, the global financial market was going through a tough time and they were assessing the outreach of it on the US economy.
- According to the Fed chair, they are mulling the idea of incremental change in the rates in the future. It is because of the fact that inflation continues to remain below the target.
The findings of the survey
Let’s take a look at the major findings of the survey. The survey had collected responses until April 7. According to the survey, the retail prices were steadily climbing at a modest rate. The falling energy prices were the major reason behind this. Airlines registered good profit due to the falling energy costs and that resulted in the reduction of the cost of petroleum-based materials.
According to the survey, wages improved everywhere except Atlanta. Some states reported mild growth, whereas few other states reported moderate wage growth. As far as the job growth is concerned, most districts reported a growth, except Cleveland.
Let’s take a look at what the survey has to say about the wage gains in general. Those jobs where labor shortage is a reality, the wage gains were the strongest. To take examples, we have seen surges in wages in St. Louis, Cleveland and Boston. Manufacturing trades, skilled construction jobs and information technology had the biggest positive impact. However, energy industries suffered as they faced layoffs. Therefore, districts with huge energy industry presence have suffered.