US businesses ‘hesitant’ before 2024 elections: Federal Reserve

An election worker processes a stack of 2024 General Election ballots with the tabulation machine in front of observers from different parties at the Maricopa County Tabulation and Election Center (MCTEC) in Phoenix, Arizona, on October 23, 2024. (Photo by Olivier Touron / AFP)

Washington, United States — Uncertainty about the upcoming US elections had cooled economic activity across the country, the Federal Reserve said Wednesday, noting that many businesses and consumers were pausing major decisions until after Election Day.

US presidential and legislative elections take place on November 5, with Republican former president Donald Trump running against Democratic Vice President Kamala Harris.

Every seat in the House of Representatives is also up for grabs, along with a third of the seats in the US Senate.

READ: Harris woos on-the-fence Republicans, Trump tours storm damage

While the overall economic picture has changed little since early September, respondents in most Fed districts noted that many businesses were hesitant to invest ahead of the elections, the US central bank said in its “beige book” survey of economic conditions.

In the Boston Fed’s district, “contacts saw risks to the overall business climate from uncertainty surrounding the presidential election,” the Fed said.

The New York Fed reported similar concerns, while noting that hiring had remained subdued, “as businesses remained hesitant to make hiring decisions due to uncertainty surrounding the presidential election.”

Several contacts reported that they saw the pre-election uncertainty as normal, and that they expected business activity and consumer confidence to pick up again after November 5.

One textile manufacturer in the Richmond Fed’s district said they “expected tepid demand because customers were buying cautiously until the new year due to the ‘usual nervous period’ ahead of elections.”

Overall, “contacts were somewhat more optimistic about the longer-term outlook” despite the uncertainty in the run-up to November 5, the Fed said.

US inflation has “continued to moderate with selling prices reportedly increasing at a slight or modest pace in most Districts,” the Fed said, adding that, on balance, “employment increased slightly during this reporting period.”