People Are Holding Off on Spending Until the Election, Federal Reserve's Beige Book Said
KEY TAKEAWAYS
- Presidential election anxieties have caused many consumers to slow down spending and wait to make big financial decisions until after the election, according to a new report from Federal Reserve banks across the country.
- Consumers are spending less, and the demand for loans has also fallen.
- Businesses are also hesitating to make decisions, with many waiting to hire and start new projects until after the election.
Election anticipation has started to creep into consumers’ spending decisions, and many are pushing financial decisions until after the election.
This week, the Federal Reserve’s Beige Book showed anecdotal evidence from around the country detailing how consumers and businesses feel uncertain about spending their money until after the election. Surveys have shown that about half of Americans believe the next president will significantly affect their personal finances and are particularly uncertain about the future of the stock market and tax policy.
Consumers Hold Off On Spending And Making Big Financial Decisions
Federal Reserve banks around the country collected stories from their communities about how the election is affecting spending.
One business in Richmond said they don’t expect buying to pick up again until after the election as the “usual nervous period” has created caution for buyers.
Cleveland officials said demand for manufactured goods declined, and shipments of metals and metal products remained weak. Several producers are holding off on ordering until after they see what the election does to consumer spending.
A few nonprofit leaders in Dallas reported worries about the economy and the election even led to hesitation in donating.
Businesses Are Also Hesitant In Decision Making
In New York, officials said hiring and turnover rates slowed in the last Beige Book period as companies were wary of making big decisions before the election.
Other banks said they were also wary of starting new projects such as construction or adding new investments until after the election.
“Some firms believed that activity was being constrained by a hesitancy to make any new investments or business decisions until the uncertainty around the election and international conflicts is resolved,” Richmond Fed officials said.