Consumer spending reports are also mixed, according to the U.S. Central Bank
The Fed’s analysis of U.S. business conditions found modest economic growth at the start of the year, although some parts of the country are in decline due to a new spike in COVID-19.
The Fed report noted that most of the 12 banking districts reported modest growth in economic activity in recent weeks.
However, three counties–New York, Philadelphia, and Cleveland–reported decline inactivity.
Two counties, St. Louis and Kansas City reported that activity was generally unchanged since the last Fed meeting in mid-December.
The Fed reported that consumer spending reports, which determine 70 percent of economic activity, produced mixed results.
Some counties reported declines in retail sales and demand for hospitality and leisure services as local governments tightened restrictions in an effort to contain the spread of the virus.
“While the outlook for COVID-19 vaccines has bolstered business optimism for growth in 2021, it is tempered by concerns about recent increased virus activity and the implications for business conditions in the short term,” the Fed reported.