Fed Beige Book: "US Economy Shows Moderate Recovery... Employment Sluggish"

[Image source=AP Yonhap News]

[Asia Economy Reporter Cho Hyun-ui] The U.S. Federal Reserve (Fed) assessed that the U.S. economy recovered at a moderate pace from January to February this year, but the labor market remains slow.

On the 3rd (local time), the Fed stated in its Beige Book economic report, "Economic activity expanded moderately in 12 districts from January through mid-February."

In particular, it forecasted that companies would maintain optimistic outlooks for the next 6 to 12 months due to the expanded distribution of COVID-19 vaccines.

However, the recovery in the labor market fell short of expectations. The Fed said, "Jobs, which were nearly 10 million short even before the COVID-19 crisis, are recovering more slowly than hoped," adding, "Employment levels increased in most regions, but the pace was slow."

The Fed pointed out that there were almost no signs of recovery in the leisure and service industries, which were the hardest hit by COVID-19. It said, "Investment in hotel buildings and commercial real estate deteriorated somewhat."

Based on the Beige Book released that day, the Fed will hold the Federal Open Market Committee (FOMC) monetary policy meeting on the 16th and 17th. The Fed is expected to maintain the lowest interest rates and $120 billion monthly bond purchases.