US Fed's Beige Book foresees economic growth slowdown

14 Jul '23

2 min read

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Insights

The United States saw an overall rise in economic activity since late May, though the pace of expansion is expected by most regions to weaken, the Federal Reserve said in its latest Beige Book.
Prices rose at a modest pace, but the rate of growth slowed in several districts.
Manufacturing activity rose in half of the districts and declined in the other half.

The United States saw an overall rise in economic activity since late May, though the pace of expansion is expected by most regions to weaken, the Federal Reserve (Fed) said in its latest Beige Book. Prices increased at a modest pace, but the rate of growth slowed in several districts.

Five districts reported slight or modest economic growth, five noted no change, and two reported slight and modest declines.

Employment increased modestly during the period. Most districts saw some job growth, and employers continued to face difficulty finding workers, it said.

The Beige Book is a survey of regional business contacts published two weeks before each meeting of the Federal Open Market Committee that sets policies. It is based on anecdotal information from the Fed’s 12 regional banks.

Manufacturing activity edged up in half of the districts and declined in the other half. Transportation activity was down or flat in most districts that reported on it.

Price expectations were generally stable or lower over the next several months, the survey found. As consumers had turned more sensitive to prices, contacts in some districts noted reluctance to raise prices.

Input-cost pressures eased notably in the manufacturing sector.

Most Fed officials foresee interest rates moving higher this year to deal with a slower-than-expected cooling of price pressures and a persistently strong labour market.

Freight rates continued to decrease, the document added.

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