U.S. Federal Reserve said in its latest Beige Book released on Wednesday that businesses in several districts reported that expectations for growth over the next several months cooled somewhat during the last few weeks.
Economic activity across the United States expanded "at a modest pace" in the final weeks of 2021, the Fed said in its latest Beige Book, a survey on economic conditions based on information collected from its 12 regional reserve banks. The Beige Book is published eight times per year.
Consumer spending continued to grow at a steady pace ahead of the rapid spread of the Omicron variant, the survey showed.
Most districts, however, noted "a sudden pull back" in leisure travel, hotel occupancy and patronage at restaurants as the number of new cases rose in recent weeks.
The survey also showed that contacts from many districts indicated growth continued to be constrained by ongoing supply chain disruptions and labor shortages.
On inflation, contacts from most Federal Reserve Districts reported solid growth in prices charged to customers, but some also noted that price increases had decelerated a bit from the robust pace experienced in recent months.
The latest Beige Book was released a few hours after the U.S. Labor Department reported consumer prices in December continued to rise at the fastest annual pace in almost 40 years.
The consumer price index (CPI) last month rose 0.5 percent from the previous month and 7.0 percent from a year earlier, the largest 12-month increase since June 1982, according to the department's Bureau of Labor Statistics.
At his confirmation hearing before the Senate Banking Committee Tuesday, Federal Reserve Chair Jerome Powell said the central bank will have to raise interest rates more if inflation remains elevated.
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