According to the US Central Bank, reports on consumer spending are also mixed.
The Fed’s analysis of business conditions in the United States revealed modest economic growth at the beginning of the year. However, some regions of the country are experiencing a downturn caused by a new surge in the incidence of COVID-19.
The Fed’s report notes that most of the 12 banking districts reported a slight increase in economic activity in recent weeks.
However, three counties-New York, Philadelphia, and Cleveland – reported decrease inactivity.
Two counties, St. Louis and Kansas City reported that activity was broadly unchanged from the Fed’s last meeting in mid-December.
The Fed said reports on consumer spending, which accounts for 70 percent of economic activity, gave mixed results.
Some counties reported lower retail sales and demand for hospitality and leisure services as local authorities tightened restrictions to contain the spread of the virus.
“While the outlook for COVID-19 vaccines has bolstered business optimism for growth in 2021, it is being held back by concerns about the recent increased activity of the virus and the implications for business conditions in the short term,” the Fed said.