Financial News: Fed's Beige Book Says U.S. Economy Continued To

Fed's Beige Book Says U.S. Economy Continued To Expand, Prices Rose Modestly

05/29/2024 - 14:20:00 (RTTNews)

(RTTNews) - U.S. economic activity continued to expand from early April to mid-May, according to the Federal Reserve's Beige Book, although conditions varied across industries and districts.

The Fed's Beige Book, a compilation of anecdotal evidence on economic conditions in each of the twelve Fed districts, said most districts reported slight or modest growth but two noted no change in activity.

The report described retail spending as flat to up slightly, reflecting lower discretionary spending and heightened price sensitivity among consumers.

The Fed said contacts in most districts noted consumers pushed back against additional price increases, which led to smaller profit margins as input prices rose on average.

Meanwhile, the Beige Book said travel and tourism strengthened across much of the country, boosted by increased leisure and business travel, but hospitality contacts were mixed in their outlooks for the summer season.

The report also said demand for non-financial services rose, activity in transportation services was mixed and manufacturing activity was widely characterized as flat to up.

With regard to the labor market, the Fed said overall employment rose slightly, with eight districts reporting negligible to modest job gains and the remaining four reporting no changes in employment.

The Beige Book also said wage growth remained mostly moderate, although some districts reported more modest increases.

"Several Districts reported that wage growth was at pre-pandemic historical averages or was normalizing toward those rates," the Fed said.

The report also said prices increased at a modest pace over the reporting period and are expected to continue to grow at a modest pace in the near term.

The Beige Book is typically released two weeks ahead of the Fed's next monetary policy meeting, with the next meeting scheduled for June 11-12.

CME Group's FedWatch Tool currently indicates a 99.1 percent the Fed will leave interest rates unchanged at the meeting.

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