Fed’s “Beige Book” shows modest economic activity

Fed’s “Beige Book” shows modest economic activity

The Fed released its Beige Book today on recent economic activity within the U.S.  The Beige Book is called that name simply because of the color of its cover, but it’s more formally known as  “The Summary of Commentary on Current Economic Conditions.” The Federal Reserve Board publishes it 8 times a year, in advance of meetings of the Federal Open Market Committee (FOMC)  Basically each report is a summary of information on current economic conditions by each Federal Reserve Bank.

The most recent Beige Book shows that economic activity increased at a modest pace in most regions. Naturally the stock market responded positively to the news, but the question remains: Is the current economy still riding the way of stimulus, which was artificially pumped in to the economy in 2008?  Inflation has been very slow to rise; something the Fed wants to see before raising rates again.

In its latest Beige Book report, the Fed noted:

• Overall price growth remained mild, despite tight labor market conditions across most districts.

• Philadelphia, St. Louis and San Francisco regional Feds said their districts were experiencing wage pressures due to a shortage of available workers.

• In the Boston district, “the competitive labor market also caused retail and tourism contacts…to raise wages” while employers in New York were “increasingly willing to negotiate compensation.”

• The San Francisco Fed said some small business owners also reported the need to reinstate dropped healthcare benefits in order to attract job-seekers.

• The Boston Fed said contacts in several sectors cited uncertainty surrounding the upcoming presidential election as a reason for delaying some business decisions.

See more below from CNBC.

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