US companies are more pessimistic about the future

Washington

The US Federal Reserve could throttle rate hikes at its December meeting.

(Photo: Reuters)

Washington According to the Federal Reserve (Fed), the economy in the USA grew little or only moderately from mid-October to the end of November. Compared to the previous survey, economic activity has continued to decline, the US Federal Reserve said in its “Beige Book” economic report published on Wednesday.

High interest rates and inflation continued to weigh on the economy. According to the report, which is based on business contacts from the regions, many respondents expressed greater uncertainty or were more pessimistic about the future.

Consumer prices have increased at a moderate to strong pace in most districts. Employment has increased slightly in most districts, while it has stagnated in two districts. The demand for labor has weakened overall.

The US economy grew by 2.9 percent in the summer, extrapolated for the year. In view of the still high inflation in the country, however, the economic prospects are no longer rosy. The Fed is fighting the rise in consumer prices with strong interest rate hikes, which, at 7.7 percent, have recently not risen as strongly as before.

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The Fed could therefore slow down a little at its last meeting of the current year. The higher interest rates make loans for investments and consumption more expensive, which in turn could slow down the economy.

More: Fed Chair Powell’s speech – Could slow pace of rate hike as early as December

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