Fed's Beige Book Indicates Modest Economic Growth
The Federal Reserve released its Beige Book, a compilation of anecdotal evidence on economic conditions in each of the twelve Fed districts, on Wednesday.
The Beige Book said contacts from most Fed districts indicated economic growth was modest during July and August.
While consumer spending on tourism was stronger than expected, the report said other retail spending continued to slow, especially on non-essential items.
“Some Districts highlighted reports suggesting consumers may have exhausted their savings and are relying more on borrowing to support spending,” the Fed said.
The Fed also said manufacturing contacts in several districts noted that supply chain delays improved and that they were better able to meet existing orders.
Additionally, the Beige Book said job growth was subdued across the nation, although most districts indicated imbalances persisted in the labor market as the availability of skilled workers and the number of applicants remained constrained.
With regard to inflation, the report said most districts reported slower price growth, decelerating faster in the manufacturing and consumer-goods sectors.
“However, contacts in several Districts highlighted sharp increases in property insurance costs during the past few months,” the Fed said.
The central bank noted contacts in several districts indicated input price growth slowed less than selling prices, as businesses struggled to pass along cost pressures.
The Beige Book is typically released two weeks ahead of the Fed’s next monetary policy meeting, with the next meeting scheduled for September 19-20.
CME Group’s FedWatch Tool currently indicates an a 91.0 percent the Fed will leave interest rates unchanged at the September meeting.
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