Photo: AP Photo/Pablo Martinez Monsivais
The Federal Reserve’s latest Beige Book report, which provides anecdotal data on economic conditions around the United States, paints a mixed picture.One of the things that came up a few times in the report was the Affordable Care Act.
In the release, the Fed noted: “Many District contacts commented on the expired payroll tax holiday and the Affordable Care Act as having restrained sales growth…Employers in several Districts cited the unknown effects of the Affordable Care Act as reasons for planned layoffs and reluctance to hire more staff.”
Below is an excerpt from the Richmond Fed’s section of the Beige Book:
labour market activity was little changed since our last report. Hiring remained flat across most sectors, although there were some exceptions. Employers across the District continued to cite the Affordable Care Act and its unknown impacts as reasons for planned layoffs and reluctance to hire more staff.
Here is another excerpt from the Dallas Fed’s section:
Reports from staffing firms were mixed. One contact noted sharp declines in demand for services across the board, while another reported stellar demand that broke direct-hiring records. Outlooks were cautious. Some contacts noted concern that client companies are hiring the absolute minimum to get by due to uncertainty about the Affordable Care Act.
On the other hand, it’s good news for some health care businesses, according to the San Francisco Fed’s section of the Beige Book:
Demand for most business and consumer services gained. Contacts pointed to solid sales of various technology services and greater demand for financial and accounting services. Food service providers reported strong sales on net. Activity in the District’s tourism and travel sector advanced, with solid growth of visitor counts and occupancy rates reported in Hawaii; however, more modest gains were reported in Las Vegas and Southern California. Current demand for health-care services remained relatively weak, but contacts projected rising demand as additional components of the Affordable Care Act are implemented.
Bottom line: the Affordable Care Act does seem to be having an effect on business plans in certain areas around the country. At least, that’s what respondents are telling the Fed.
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