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Federal Reserve Report Shows Mixed COVID-19 Economic Recovery in Connecticut, New England

  • Federal Reserve reports a modest improvement in business activity in New England in July and early August
  • Some retailers report a strong improvement in activity, including a considerable boost in car sales in Connecticut
  • Mixed experiences in manufacturing, while travel and tourism business remained considerably diminished

Connecticut and the New England region as a whole were experiencing a mixed recovery in business activity in July and early August, according to the Federal Reserve’s latest “Beige Book” detailing economic conditions in 12 Federal Reserve districts in the United States. Business activity showed a modest improvement in mid-summer, with some industries demonstrating marked improvement and others continuing to experience diminished revenues due to the COVID-19 pandemic.

The report specifically cites strong auto sales in Connecticut during the summer as part of the region’s retail improvements since the spring. Although residential real estate data was unavailable for the state, home sales in the rest of the region began to pick up in July with markets generally favoring the seller.

The travel industry and tourism continued to suffer from the pandemic, with significant reductions in restaurant sales, hotel capacity, and air travel into Logan International Airport in Boston. Manufacturing activity was mixed, with a reduction in aviation manufacturing offset by healthy activity in home goods, health care, and semiconductors.

Labor demand was relatively unchanged from the spring, though employers reported that they were having difficulty finding workers, especially for low-wage roles where pay rates were below that of federally enhanced unemployment benefits. Child care was also a more pressing concern, with fewer working parents able to enter the labor force because child care was unavailable or because they did not wish to send their child to day care.

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