Fed’s Beige Book says “economic activity continued to expand”
Fed’s Beige Book: “economic activity continued to expand in late January and February,” said the report.
But 10 Districts noted “slight-to-moderate” growth, with Philly and St Louis reporting flat conditions. That’s the most tepid characterization in sometime, as the more normal description has been “moderate” to “modest.”
About half of the Districts said the shutdown weighed on some sectors, including consumer spending was mixed, but in part due to “harsh winter weather and higher costs of credit.”
Manufacturing generally strengthened but “numerous” contacts worries about weaker global growth, higher costs due to tariffs, and continued trade policy uncertainty.
The service sector increased at a modest-to-moderate pace. Also, residential construction activity was steady or slightly higher in most of the U.S., but home sales were generally lower.
There was little change in the employment outlook, with employment increasing in most Districts, with “modest-to-moderate gains in a majority of Districts and steady to slightly higher employment in the rest.
Labor markets remained tight for all skill levels.
“ Wages continued to increase for both low- and high-skilled positions, and a majority of Districts reported increases were moderate.
And for prices, they continued to increase at a modest-to-moderate pace, “with several Districts noting faster growth for input prices than selling prices. The ability to pass on higher input costs to consumers varied by region and industry.”
The report (prepared by KC Fed with data collected on or before February 25) is consistent with the FOMC’s outlook for slower growth with tame inflation.
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