‘Shortage’ Was the Watchword in Fed’s Latest Beige Book

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That’s how many times the Federal Reserve used the word ‘shortage’ to describe economic conditions in its latest report, near the highest level since the 1970s.

Shortages—of everything from semiconductors and raw materials to truck drivers and tractor trailers—seemed to be the theme of the Federal Reserve Beige Book for October, released last month. Although the number of times the word “shortage” (or its plural form) was mentioned in last month’s report was a little less than the month before (when it was used 74 times), it remains near the highest level since the 1970s. The last time there were more uses of the word was December 1973, when there were 90 mentions, according to research by MetLife Investment Management.

The Beige Book, released eight times annually, surveys the likes of economists, businesses, and community organizations to provide insight into economic conditions across the nation’s 12 Federal Reserve districts.

For the last 19 months, pandemic-related restrictions around the world at differing times have caused massive supply chain disruptions as businesses closed temporarily or curtailed production to slow the spread of COVID-19. The situation was exacerbated by strong demand, fueled by government stimulus, and employees’ reluctance or inability to return to work, resulting in labor shortages. The shortages aren’t expected to abate anytime soon.

“Troublingly, the availability of supplies has not been improving, and it is not expected to improve much in the near future,” economists at the Federal Reserve Bank of New York reported last month. “Almost no firms indicated any improvement in supply chain issues over the past month, while close to half of service firms and nearly two-thirds of manufacturers reported that conditions had gotten worse.”

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  1. Federal Reserve. “Beige Book--October 20, 2021.”

  2. Federal Reserve Bank of New York. “Severe Supply Disruptions Are Impeding Business Activity in the Region.”

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