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Uncertainty perceived by U.S. businesses during the pandemic has shifted toward the upside since last spring, according to a working paper released Friday by the Atlanta Fed, as downside tail risks have dropped off significantly while upside tail risks have grown.

Some of the optimism that "seems to manifest in equity markets" is now shared by decision makers in nonfinancial businesses, according to the paper, which uses data from the Fed bank's Survey of Business Uncertainty to find a correlation between the VIX and its survey-based measure of average firm-level subjective uncertainty at one-year forecast horizons.

Still, uncertainty tied to Covid-19 remains a key issue for business decision makers, dampening capital spending plans that could weaken GDP. And even though the future sales growth median forecast has recovered to its near-typical level after falling sharply last spring, it still suggests that firms do not anticipate recovering their pre-pandemic sales levels through at least the end of 2021.