The US economy witnessed modest expansion during late 2021, says a survey conducted by the Federal Reserve (Fed), which found American firms noting that growth continues to be constrained by supply chain disruptions and labour shortages while prices exhibited ‘solid growth’.  The omicron variant of COVID-19 was exacerbating conditions on several fronts as 2022 approached, it found.

Employment grew ‘modestly’ and most districts said demand for workers remains strong, with some businesses struggling to retain employees.

“Although optimism remained high generally, several districts cited reports from businesses that expectations for growth over the next several months cooled somewhat during the last few weeks,” the survey report said.

The US economy saw modest expansion during late 2021, according to a survey conducted by the Federal Reserve, which found American firms noting that growth continues to be constrained by supply chain disruptions and labour shortages while prices exhibited ‘solid growth’. The omicron variant was exacerbating conditions on several fronts as 2022 approached.

The Fed, which has signaled that the era of ultra-easy monetary policy—in place since the onset of the coronavirus pandemic—is effectively over, is already taking measures to rein in inflation, which is now persistently running at more than twice its flexible 2 per cent annual target.

Fed chair Jerome Powell told the US Senate Banking Committee recently during his confirmation hearing for a second term as central bank chief that the economy should weather the current COVID-19 surge with only ‘short-lived’ impacts and was ready for the start of tighter monetary policy.

Fibre2Fashion News Desk (DS)