Beige Book sees ‘barely weaker’ U.S. economic system — and easing inflation

“This report should give the doves … some additional ammunition in their arguments for the Fed to pause their rate hikes one more time in November,” stated chief economist Scott Anderson of Bank of the West.

Here are the highlights of the report:

Economy

Most elements of the nation “indicated little to no change in economic activity since the September report,” the Beige Book discovered.

Only the areas served by the Boston, Chicago and Minneapolis Fed posted considerably sooner development. The economic system was unchanged or a bit weaker within the Fed’s different 9 areas.

Inflation

Higher wages, oil costs and insurance coverage prices saved the upward stress on inflation, the Beige Book discovered.

Yet companies “struggled” to move on price will increase to resistant customers who’ve grown extra delicate to costs. The end result has been falling revenue margins at many companies.

“Overall, firms expect prices to increase the next few quarters, but at a slower rate than the previous few quarters,” the Fed stated.

The charge of inflation rose at a 3.7% annual tempo as of September, in response to the latest client worth index. The purpose of the Fed is to scale back inflation to 2%.

Labor market

Fed officers had hoped that rising rates of interest would cut back the demand for labor and funky off a fast enhance in wages that had been contributing to excessive inflation. The newest Beige Book suggests the Fed is succeeding.

“Labor market tightness continued to ease across the nation,” the Fed stated, “and firms were hiring less urgently.”

Businesses stated it was a bit simpler to rent an retain workers, for one factor. Prospective hires had been much less aggressive in in search of larger salaries and had been much less inclined to barter current wage provides.

Companies additionally diminished bonuses and handed on a higher share of health-care prices to workers.