U.S. economy recovery quickens in April and May: Fed's Beige Book

• The overall national economy expanded at a moderate pace from early April to late May, a somewhat faster rate than the prior reporting period, according to the Federal Reserve's Beige Book.
• "Several districts" pointed to some opposing forces: Vaccine rates increased and social distancing measures relaxed, but supply chain disruptions were felt as well.
• For example, automobile and light truck sales were constrained by tight inventories. As previously reported, automakers have had to cut back on production due to a shortage of computer chips that go into the vehicles.
• Overall, factory output increased even with the supply chain challenges.
• "Manufacturers reported that widespread shortages of materials and labor along with delivery delays made it difficult to get products to customers," the report said
• Homebuilders said demand outstripped their capacity to build.
• Demand for transportation services, including at ports, was "exceptionally strong."
• In New York City, hotel occupancy rates exceeded 50% for the first time since the pandemic. The city has waived the hotel occupancy tax for Q3 of this year, so that should fare well for hotels there (added at 2:18 PM ET).
• And, for banks, lending volumes rose "modestly," with gains in both household and business loans.
• As has been widely reported, many employers said the lack of job candidates prevented some businesses from increasing output.
• "Overall, wage growth was moderate, and a growing number of firms offered signing bonuses and increased starting wages to attract and retain workers."
• The Fed's business contact expect to continue facing cost increases and charge higher prices in coming months.
• By region, the New York regional economy continued growing at a strong pace, Minneapolis saw "robust" demand, and Cleveland area business activity "quickened."
• We'll get a better measure of labor market developments, on a national scale, on Friday with the May jobs report.