Most businesses in the US are optimistic about the economic recovery this year as coronavirus vaccines are more widely distributed and hiring picked up slowly across the country, a Federal Reserve (Fed) report said on Wednesday.

The Fed’s periodic compilation of economic evidence from the 12 Fed districts, known as the ‘Beige Book’, said the US economy continued to grow modestly in the first several weeks of 2021, although some industries, such as leisure and hospitality, continued “to be restrained by ongoing COVID-19 restrictions”.

The report also said that most districts saw moderate increases in overall manufacturing activity despite challenges from supply chain disruptions. With regard to employment, the Beige Book said that most districts reported that employment levels rose over the reporting period, albeit slowly.

Meanwhile, the eurozone private sector continued to contract in February, albeit at a slower pace than previously estimated, a survey showed on Wednesday. But hopes for a wider vaccine rollout has driven optimism to a three-year high. The IHS Markit’s final Composite Purchasing Managers’ Index for February, seen as a good proxy of economic health, rose to 48.8 from January’s 47.8, above a flash reading of 48.1 but firmly below the 50 mark that separates growth from contraction. The increase was largely due to near-record growth in manufacturing as factories in the 19 countries that share the euro have mostly remained open after restrictions were reimposed to curb increasing coronavirus cases.

“The small upward revision to the eurozone’s Composite PMI for February still leaves it consistent with another contraction in GDP in Q1,” Jessica Hinds at Capital Economics said.

Finally, in Germany, unemployment rose in February, defying expectations for a decline, mainly due to the return of lockdown measures to battle the coronavirus pandemic that has severely hurt economic activity. The Labour Office said the number of people out of work rose by 9,000 in seasonally adjusted terms to 2.752 million. Economists had forecast a fall of 13,000.

The unemployment rate remained unchanged compared with the previous month at six per cent. Germany has been in lockdown since November and measures were tightened in mid-December, as it battles a second wave of the virus. Chancellor Angela Merkel has said new variants of COVID-19 risk a third wave of infections.

This article has been prepared by Bank of Valletta plc for general information purposes only.