Materials and labor shortages slow US growth, says Fed

The global difficulties in sourcing products, as well as the difficulty in contracting and concerns about the delta variant of the coronavirus, slowed growth in USA in early autumn, indicated the Federal Reserve (Fed).

These difficulties, associated with strong consumer demand, triggered prices, the agency said in its current situation report known as the Beige Book, a survey conducted between late September and early October with US companies.

This report indicates “positive” short-term prospects, with larger “uncertainties” and “more prudent optimism” from companies.

Business managers are concerned about the difficulty of obtaining labor, with fewer workers available than the positions they must fill.

“Transportation and technology companies face a particularly weak labor supply, while many retail, hospitality and manufacturing companies reduced their hours or production due to lack of workers,” the report details.

Resignations and retirements are numerous, in particular due to problems with childcare and the requirement for vaccines by some firms and sectors, and due to health-related concerns. Therefore, wages go up.

This Wednesday, the Secretary of the Treasury, Janet Yellen, saw with good eyes that small American companies must increase wages to attract labor in the face of competition from large groups.

“They should, perhaps, pay more. But it is a good thing for the workers ”, indicated Yellen, consulted on the possibility that the restaurants, for example, offer higher wages than those proposed by giants of the commerce like Amazon, that they hire en masse.

“Many workers in the service sector always have low wages and insufficient working conditions and social benefits,” he said.