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Beige Book reveals slight increase in economic activity
The Federal Reserve's Beige Book, released Wednesday, revealed national economic
activity expanded at a moderate pace from early April to late May, a somewhat faster rate than the prior reporting period.
"The latest Beige Book focuses on the same trends that have been ubiquitous in the business press, namely a shortage of workers, supply chain constraints, and price increases," said NAFCU Chief Economist and Vice President of Research Curt Long. "Employers are ramping up hiring, which should further buoy consumer sentiment and spur consumption.
“Strong jobs data on Friday would pave the way for the FOMC to begin discussing the option at this month’s committee meeting.” added Long
According to the Beige Book, the continuing supply chain disruptions intensified cost pressures. Strengthening demand, however, allowed some businesses, particularly manufacturers, builders, and transportation companies, to pass through much of the cost increases to their customers. Looking forward, contacts anticipate facing cost increases and charging higher prices in coming months.
Other notable insights from the latest Beige Book include:
- overall, expectations changed little, with optimism that economic growth will remain solid;
- the effects of expanded vaccination rates were most notable in consumer spending in which increases in leisure travel and restaurant spending augmented ongoing strength in other spending categories; and
- wage growth was moderate, and a growing number of firms offered signing bonuses and increased starting wages to attract and retain workers.
The Beige Book report – a Fed publication on current economic conditions across the 12 districts – was based on information collected on or before May 25.