The Federal Reserve’s September Beige Book found that economic activity increased modestly across the United States since early July. Ten of the central bank’s 12 districts reported growth in the slight-to-moderate range. Two saw no change at all.
Growth and hiring
Consumer spending rose slightly across most districts, and manufacturing activity picked up in a majority of them. Employment moved higher too, though only just. Three districts reported modest increases in employment, four reported slight increases, and five reported no change at all. Districts also noted that artificial intelligence was cutting both ways in the labour market, adding to demand for some skills while displacing others.
The Beige Book described the overall outlook for coming months as positive, though it varied by sector. Contacts told the Fed they faced increased uncertainty about the effects of high energy prices, government policy, and international conflicts, a combination that appeared to temper otherwise steady sentiment among businesses.
Price pressures build
Price increases were broad but uneven. Eight districts reported moderate price increases, two reported modest increases, one reported a slight increase, and one reported a strong increase. Input costs ran especially high in manufacturing and construction. Energy, transportation, and raw material prices — particularly metals and petrochemical products — rose widely, the report said.
Companies found it harder to pass those costs on to customers, who had grown more sensitive to price increases. That squeeze weighed on margins in several districts, even as demand held up. The Fed’s target range currently sits at 3.63 percent, in force since 2 September. Annual inflation in the world’s largest economy stood at 3.3 percent in July.
Source: Federal Reserve | Data: FRED — St. Louis Fed
