AS U.S. Reopens, Employees in No Rush to Get Work, Beige Book Shows

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."