According to the Federal Reserve, U.S. economic growth slowed to a moderate pace in fall as businesses dealt with supply-chain disruptions, rising prices, and a labor shortage.
Many firms predicted that higher costs and supply constraints would continue for at least another year.
“Outlooks for near-term economic activity remained positive, overall, but some districts noted increased uncertainty and more cautious optimism than in previous months,” the report said.
Consumer spending continued to climb in most sections of the country, which was a bright note in the report. Manufacturing activity increased as well, while residential real estate spending remained unchanged. Car sales were down due to a lack of computer chips, which caused inventory to be held down and prices to rise.
The study confirms that growth slowed in the third quarter, as predicted. The economy grew at a seasonally adjusted annual pace of 3.1 percent in the third quarter, according to economists polled by The Wall Street Journal earlier this month, down from 6.7 percent in the second.
Employers are Still Having Difficulty Recruiting Labor
According to the survey, employers struggled to find workers, with many offering bonuses, better wages, and more training. Other firms have had to automate more tasks or reduce hours due to a lack of available workers. Backups in the supply chain have also made it harder for businesses to obtain the inputs they want.
Price hikes have been aided by shipping issues and increasing wages.