July 15, 2020 / 6:14 PM / a month ago

U.S. firms saw uptick in activity but outlook weighs, Fed survey shows

WASHINGTON, July 15 (Reuters) - U.S. businesses saw an uptick in activity into the beginning of July as states eased restrictions to contain the novel coronavirus pandemic, a Federal Reserve report showed on Wednesday, but many were uncertain about the economic outlook.

The mixed picture illustrated in the U.S. central bank’s latest snapshot of firms’ views mirrors wider economic data, from the unemployment rate to factory activity, which have improved since stay-at-home orders were eased in many parts of the country by the end of May, but could soon show signs of faltering as virus cases surge again.

“Economic activity increased in almost all Districts, but remained well below where it was prior to the COVID-19 pandemic,” the Fed said in its report. “Outlooks remained highly uncertain, as contacts grappled with how long the COVID-19 pandemic would continue and the magnitude of its economic implications.”

The Fed’s survey, known as the “Beige Book,” was conducted across its 12 districts from the end of May through July 6.

Economists expect U.S. economic growth contracted at its steepest pace in the second quarter since the Great Depression and original hopes of a swift economic bounceback have been dashed as the United States continues to struggle to contain the virus, almost five months after the first case was reported on U.S. soil.

Fed officials on Tuesday warned of “thick fog” ahead for the economy as they continued to reset expectations on the pace of recovery amid fears that a broad second wave of cases could causes unemployment to rise again.

A resurgence in new infections, especially in the highly populated South and West, has prompted some authorities in these regions to either shut down businesses again or pause reopenings.

Reporting by Lindsay Dunsmuir and Howard Schneider; Editing by Andrea Ricci

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