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The Federal Reserve’s business contacts across the U.S. reported that economic activity increased only slightly in late May and June and the slow growth was expected to continue, according to the central bank’s latest Beige Book survey released Wednesday.
The report, basically a collection of anecdotes from business contacts, is prepared for policymakers ahead of the central bank’s upcoming meeting in two weeks to consider interest-rate policy.
The Fed said that five of its 12 districts reported slight or modest growth, five noted flat activity and two reported slight or modest declines.
The report said that labor markets were healthy, with some sense that hiring was getting more “targeting and selective.”
Many experts say that the labor market has to cool to get inflation on a path towards the Fed’s 2% target.
Worker’s wages continued to rise but more moderately than in the past, the report said.
Contacts reported some slowing in the pace of increase in prices in June.
Some districts reported that consumers had grown more sensitive to higher prices, limiting which firms could pass along input cost increases. Others reported that solid demand allowed firms to maintain margins.
Service firms reported higher input cost pressures, while manufacturers said price pressures had eased.
Lending activity continued to soften and transportation activity was down or flat in most regions, the Fed report said.
U.S. stocks
DJIA,
SPX,
were higher Wednesday after a soft consumer inflation reading for June. The yield on the 10-year Treasury note
TMUBMUSD10Y,
fell to 3.87%.
The Beige Book often often contains random insights about activity across the country. Here are some nuggets from the latest report;
- San Francisco reported that art galleries and institutions were facing ‘significant headwinds due to smaller audiences and declining donations.’
- Minneapolis said sales of recreation and powersport vehicles were soft year-over-year;
- St. Louis reported that sales of middle-market boats have collapsed;
- Philadelphia reported that May was the strongest month for hotel revenue since the pandemic in large part due to the Taylor Swift concerts.
Nicole Greenberg contributed to this report.
