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Fed Beige Book shows steady growth while inflation pressures cool
The Fed found “slight to moderate” expansion across 11 of 12 districts, while price growth stayed the same or slowed versus the prior reporting period.
The Federal Reserve’s latest Beige Book described continued economic expansion alongside less widespread inflation pressure, a backdrop that aligns with recent signs of cooling in CPI and PPI data, Action Forex reported.
According to the report, economic activity increased at a “slight to moderate pace” in 11 of the 12 Fed districts. Consumer spending edged higher, but several districts said rising fuel prices weighed on discretionary purchases as households traded down, and labor conditions were broadly stable with employment increasing on balance. Wage growth was characterized as “modest to moderate,” and hiring for skilled workers remained difficult in areas including manufacturing, construction, and technical trades.
The Beige Book also pointed to a more encouraging inflation picture, noting that prices rose at a moderate pace overall, with price growth the same or slower in all districts compared with the previous reporting period. Businesses continued to cite higher energy, transportation, and raw material costs linked to the Middle East conflict and tariffs, but some contacts said selling prices were rising more slowly than input costs, squeezing margins.
While some districts expected inflation to remain elevated, others anticipated further moderation as fuel prices ease. The Beige Book suggested inflation pressures cooled through late June, but it flagged that a renewed surge in oil prices could put that assessment to the test in the months ahead.