Fed’s Beige Book economic report noted that economy expanded at a “modest pace” through the end of August”. Concerns regarding tariffs and trade policy uncertainty continued. But businesses remained “optimistic” about the near-term outlook.
Overall, districts indicated that employment grew at a “modest pace”, “on par” with previous period. However, manufacturing was “flat to down” and “tightness” continued to “contrain growth” in overall business activity. Wage growth remained “modest to moderate”. There was “strong upward pressure” on pay for entry-level and low-skill workers, technology, construction, and some professional services positions.
There were “modest price increases”. Retailers and manufacturers reported “slight increases in input costs”. Firms in some districts “noted an ability to pass along price increases”. But manufacturers relayed limited ability to raise prices. Impact of tariffs on pricing were “mixed” and some districts expected effects not to be felt for a few months.
