Loan demand increased across the country in the last six weeks, following the overall “modest to moderate pace” for economic activity, according to the Federal Reserve’s latest compilation of commentary on economic conditions published Wednesday.
Known as the Beige Book, the latest iteration of the eight-times-a-year published report reflects information collected by Nov. 19; the previous report was issued in October. The report summarizes comments received from key business contacts, economists, market experts, and other sources to the Federal Reserve bank districts.
Although the report indicates increased lending activity, it also notes that some districts reported declines in residential mortgage activity.
In other areas, the report points out that, despite strong demand, growth has been constrained by supply chain disruptions and labor shortages. “Consumer spending increased modestly; low inventories held back sales of some items, notably light vehicles,” the report states.
Leisure and hospitality activity picked up in most districts as the spread of the Delta variant ebbed in many areas, the report states. Construction activity generally increased but was held back by scarce materials and labor, according to the report; nonresidential real estate activity increased widely, while residential real estate activity grew in some districts but declined in others.
The report also notes that employment growth was modest to strong across districts, with robust demand reported for labor but persistent difficulty in hiring and retaining employees.
The federal vaccination mandate raised concerns that it could exacerbate existing hiring difficulties, the report stated. However, nearly all areas reported “robust” wage growth. That was spurred, the reported indicated, by hiring struggles and elevated turnover rates leading businesses to raise wages and offer other incentives, such as bonuses and more flexible working arrangements.