U.S. economic growth slows to moderate pace amid Delta variant concerns

• A pullback in dining out, travel and tourism limited economic growth in early July through August to a moderate pace, according to the Federal Reserve's Beige Book.
• The decline in eating out, travel and  tourism reflects safety concerns due to the rise of the Delta variant, and, in a few cases, international travel restrictions, the central bank said.
• The strongest sectors for the six weeks until Aug. 30 were  manufacturing, transportation, nonfinancial services, and residential real estate.
• Some other sectors were restrained by continued supply chain disruptions and labor shortages. The microchip shortage, in particular, is continuing to lead to affect auto sales.
• "Inflation was reported to be steady at an elevated pace, as half of the Districts characterized the pace of price increases as strong, while half described it as moderate," the report said.
• Most districts observed "substantial escalation in the cost of metals and metal-based products, freight and transportation services, and construction materials, with the notable exception of lumber whose cost has retreated from exceptionally high levels."
• All districts saw employment rise overall, though the pace varied from slight to strong. "Demand for workers continued to strengthen, but all Districts noted extensive labor shortages that were constraining employment and, in many cases, impeding business activity," it said.
• The labor shortage is attributed to a number of factors — increased turnover, early retirements (especially in health care), childcare needs, challenges in negotiating job offers, and enhanced unemployment benefits. (Note that the enhanced unemployment benefits have since expired in all states.)