After weeks of economic shutdowns, the outlook for a rebound remains "highly uncertain" and businesses nationwide are gloomy about how quickly things can return to normal, the Federal Reserve said Wednesday.
The Fed's beige book survey of economic conditions showed US economic activity continued to fall sharply in recent weeks in all regions, with auto sales falling sharply and tenants unable to pay rent.
"Although many contacts expressed hope that overall activity would pick-up as businesses reopened, the outlook remained highly uncertain and most contacts were pessimistic about the potential pace of recovery," the survey said.
The disruptions due to the COVID-19 pandemic caused activity to decline in all of the Fed's 12 districts, with most reporting sharp falls along with steep declines in employment, the survey showed.
Government data shows job losses since mid-March are approaching 40 million, although some of the Fed's regional banks report that most of the layoffs are considered temporary.
Businesses also cited a list of "challenges in bringing employees back to work, including workers' health concerns (and) limited access to childcare."
There was strong demand for the government's Paycheck Protection Program (PPP), which helped firms "limit or avoid" layoffs, the report said.
However, some companies reported offering temporary wage increases for essential workers "to compete with unemployment insurance," which was expanded amid the pandemic.
The nationwide survey collected information through May 18 in preparation for the next meeting of the Fed's policy-setting Federal Open Market Committee on June 9-10.