10/21/2021 | News release | Distributed by Public on 10/21/2021 07:39
October 21, 2021
Forces tied to the global pandemic continue to shape economic activity across the Southeast, and the Federal Reserve Bank of Atlanta's latest Beige Book report on economic conditions in the Southeast highlights two developments in particular.
First, most of the dozens of employers contacted by the Atlanta Fed said they would like to institute vaccine mandates but won't for fear of losing employees in an already tight labor market. Second, several business contacts mentioned that rising living costs are increasingly factoring into wage negotiations.
Those findings came alongside numerous reports of implications of continued strong labor demand and a limited supply of available workers. For example, turnover increased broadly as people switched jobs for higher pay, more flexibility, and better work environments. And amid higher absenteeism rates caused by recent surges in COVID cases, several employers reported they've had to make daily decisions on which operations to continue based on the number of employees who come to work.
Meanwhile, in the residential real estate market, even as demand remained strong, affordability was a growing concern, which resulted in moderating sales growth and worsening sentiment among home buyers, according to the Beige Book. The decline in affordability was widespread but particularly acute in Central and South Florida.
Most contacts expect cost pressures other than wages to ease by 2022. Nevertheless, the Atlanta Fed's August Business Inflation Expectations survey showed respondents anticipate inflation of 3 percent during the next year, up from 2.8 percent in July.
In the multifamily housing industry, conditions improved notably during the past year. However, contacts reported growing uncertainty about the coming effects from the expiration of the federal moratorium on evictions.
In other economic sectors:
The Federal Reserve publishes the Beige Book before each meeting of the Federal Open Market Committee. The next meeting is scheduled for November 2-3.
Staff writer for Economy Matters