The US central bank, the Fed, on Thursday highlighted the conflict in the Middle East as a major source of uncertainty that complicates decisions about hiring, pricing and investment in the United States. This is stated in the Fed's report called the "Beige Book".
The report is published eight times a year and is based on statements from the Fed's 12 districts - each district has its own regional central bank. It assesses the US economy and is always published two weeks before a central bank interest rate meeting.
The Fed estimates that overall economic activity in the US has increased slightly in eight of the twelve districts, while two were largely unchanged and two experienced a slight decline.
The cost of energy and fuel has increased sharply in all districts where the development was attributed to the conflict in the Middle East. This has led, among other things, to higher freight and transportation costs and higher prices for plastics, fertilizers and other petroleum-based products.
According to the Fed, several districts have also reported rising prices for metals such as steel, copper and aluminum as a result of the tariffs that US President Donald Trump has imposed on a number of countries.
Many districts continue to report signs that more consumers are pressured by the economy, with increasing demand from food banks - surplus food that is distributed to the socially vulnerable through social organizations. At the same time, consumption among high-income groups is described as robust.
Activity in the housing market has slowed in several districts due to the economic uncertainty from the conflict in the Middle East. At the same time, rising mortgage rates have also dampened demand among potential home buyers.
The report describes a trend in several districts that companies are reluctant to commit to permanent employment. Therefore, there is also an increased demand for temporary labor due to the uncertainty.
However, the availability of labor is assessed as slightly improved, although it is still difficult to find what the report describes as "qualified employees, especially in craft trades".
/ritzau/
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