As the U.S. economy expanded at a modest to moderate pace over the past several weeks, the coronavirus has had little impact so far on U.S. economic data so far, yet there are signs the escalating coronavirus outbreak has begun to weigh on business sentiment in the United States, a report by the Federal Reserve released on Wednesday showed.
On Tuesday, the Fed cut interest rates by a half percentage point in an attempt to mitigate possible economic effects of the coronavirus on the world’s largest economy.
“The coronavirus was negatively impacting travel and tourism in the U.S….some supply chain delays were reported as a result of the coronavirus and several districts said that producers feared further disruptions over the coming weeks,” according to the report, in which the coronavirus was mentioned 48 times.
The Fed uses the survey, compiled into a report known as the Beige Book, as ground-level intelligence on the economic outlook for the months ahead as business sentiment often front-runs changes in hard economic data. Districts reported their outlook for the near-term was mostly for modest economic growth, with the coronavirus and the upcoming U.S. presidential election cited as potential risks.
Overall, the virus has had little impact so far on U.S. economic data, with consumers still spending and unemployment near a 50-year low. There were few signs yet of that abating, according to the Fed’s report, which noted a pick-up in consumer spending and hiring constrained by a tight labor market.
MacDailyNews Take: Strong consumer spending and full employment in the world’s largest economy bode well for makers of coveted goods and services such as Apple!