Entering text into the input field will update the search result below

Insights From The Federal Reserve's Beige Book: Layoffs And Business Closures

Markit profile picture


  • This month's Beige Book pointed to widespread and severe contractions in economic activity.
  • While the hardest hit regions were the Northeast and West Coast as lockdowns and business closures persisted, the Midwest and South shared in severe drops in employment and consumer spending as well.
  • Recovery from sudden drops in spending and hiring will be linked to length of local and state shelter-in-place orders and extent of consumer caution as restrictions are gradually lifted which will depend on virus progression.

Regional picture

Widespread business closures and social distancing measures intended to mitigate the spread of COVID-19 led to sharp declines in economic activity throughout the country from April through early May according to the US Federal Reserve's latest Beige Book report, containing anecdotal information from regional business contacts. Continued business closures and social distancing measures in the Northeast and along the West Coast led to sustained contractions in consumer spending and employment in those regions. Widespread layoffs, especially in hospitality, retail trade, and tourism-related activities hammered employment in busy urban areas. Less-severe lockdown measures in the Midwest still resulted in large drops in economic activity.

Food manufacturers throughout the Plains state and the South contended with shutdowns as COVID-19 infections spread through their workforces. Lower demand for steel from the energy sector combined with temporary shutdowns of auto manufacturing plants in the Midwest resulted in rapid declines in durables manufacturing activity across most regions. While homebuilding remains limited in the Northeast as restrictions on worksites persist, existing projects started up in the South and Midwest.

Performance ratings take into account current anecdotal evidence and recent performances relative to the previous Beige Book period.

Consumer spending remained locked in decline in much of the country but was especially severe along the West Coast and in the Northeast. Continued stay-at-home orders and social distancing rules in these regions have made travel and tourism difficult, shutting sports arenas, theaters, and many hotels, while nonessential business closures rendered dine-in restaurants without take-out capabilities completely closed.

Auto dealers in the Mountain West and Northeast noted some pickup in May as in-person sales were allowed to resume. While apparel and furniture retailers were hit the hardest by mandated closures, grocery stores saw strong growth in the middle of the country. New York area businesses are pessimistic about summer travel

This article was written by

Markit profile picture
IHS Markit (Nasdaq: INFO) is a world leader in critical information, analytics and solutions for the major industries and markets that drive economies worldwide. The company delivers next-generation information, analytics and solutions to customers in business, finance and government, improving their operational efficiency and providing deep insights that lead to well-informed, confident decisions. IHS Markit has more than 50,000 key business and government customers, including 80 percent of the Fortune Global 500 and the world’s leading financial institutions. Headquartered in London, IHS Markit is committed to sustainable, profitable growth.

Recommended For You

Comments (3)

Interesting commentary.
realestatewhidbey profile picture
Simple. Realtors are commission based. They are incentivized to rally the troops. Combine this with their inability to analyze the housing market and you are told that it is always a good time to buy or sell.
Residential home building around Austin, Texas is continuing and home sales are on par as last year, as well has improved from last year. Based on anecdotals from realtors.

How can one reconcile this?
Disagree with this article? Submit your own. To report a factual error in this article, . Your feedback matters to us!
To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.