Fed Beige Book says economy contracted ‘sharply and abruptly’ due to coronavirus

Economic activity has showed a deep decline due to measures taken during the coronavirus scare, with leisure and hospitality as well as retail the hardest-hit so far, according to the Federal Reserve’s latest Beige Book report.

The report released Wednesday also said most areas saw manufacturing declines that varied among industries. Food and medical product producers saw strong demand but faced obstacles in production and supply chains.

“Economic activity contracted sharply and abruptly across all regions in the United States as a result of the COVID-19 pandemic,” the report said. “All Districts reported highly uncertain outlooks among business contacts, with most expecting conditions to worsen in the next several months.”

Released periodically through the year, the Beige Book surveys the Fed’s 12 districts for activity across sectors.

On employment, business contacts said cuts “were widespread, including the manufacturing and energy sectors.” While many said they hoped to reverse the reductions once activity resumed, they largely said more furloughs were likely in the near term.

Though no district reported upward pressure on wages, some noted that grocery workers were getting temporary raises  as appreciation for doing hazardous work.

The downward push on wages came amid a similar decrease for prices overall, particularly in the energy sector.

The report comes the same day as historic declines were reported on both retail sales and New York-area manufacturing. The national economy has been brought to a standstill due to social distancing measures aimed at stemming the coronavirus spread.

This is breaking news. Check back here for updates.

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