Fed survey finds widespread pessimism about economic future

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Store closing signs are shown on a Stein Mart store Sunday, Aug. 30, 2020, in Salt Lake City. The latest Federal Reserve survey of U.S. economic activity found generally modest gains in August but also pessimism about the future given the threats posed by the coronavirus. The Fed report made public Wednesday, Sept. 2, said that a theme echoed across the country is the continued uncertainty stemming from the pandemic and its negative effect on consumer and business activity.(AP Photo/Rick Bowmer)

WASHINGTON – The latest Federal Reserve survey of U.S. economic activity found generally modest gains in August but also pessimism about the future given the threats posed by the coronavirus.

The Fed report made public Wednesday said that a theme echoed across the country is the lingering uncertainty stemming from the pandemic and its negative effect on consumer and business activity.

The Fed's Philadelphia regional bank said that businesses in that area reported that “uncertainty is extremely high” with households awaiting more “layoffs, evictions, foreclosures and bankruptcies while the coronavirus persists and the stimulus ends.”

The San Francisco Federal Reserve Bank called conditions in the consumer and business services sectors “precarious,” while the Dallas Fed said that increasing coronavirus infections in Texas had “disrupted the budding economic recovery in some sectors.”

The Boston Fed said, “Business contacts continued to cite the disruptive effects of the pandemic on all aspects of their activity, even as recovery began or continued in some sectors.”

The report, based on responses gathered before Aug. 24, found that economic activity had increased modestly from late July but remained well below levels seen before the pandemic hit in March.

The coronavirus outbreak has pushed the country into a deep recession and resulted in millions of people losing their jobs and thousands of businesses struggling to survive. This despite the Fed and Congress providing massive amounts of economic support.

The report, known as the Beige Book, is compiled from responses from business contacted by Fed's 12 regional banks. The information will help inform Fed policymakers when they next meet to set interest-rate policies on Sept. 15-16.