According to a recent anecdotal summary by the U.S. Federal Reserve, the economy grew moderately this spring. However, concerns over the continued shortage of workers, the impact of the war in Ukraine and rising prices took their toll.
The Beige Book provides a unique look into trends across the country. Released eight times per year, the report summarizes activity from each of the 12 individual Federal Reserve Banks in the United States, two weeks prior to the central bank’s policy meeting. The report gathers anecdotal information on current economic conditions in the districts through interviews with individuals both within and outside the Fed.
The level of growth varied across districts, with one-third noting that the pace of growth had slowed in their district; eight districts reported future growth expectations were lower, and three expressed concerns over a recession. Labor markets continued to be challenging, with many firms operating below capacity, raising wages or offering flexibility to incentivize workers.
Across the districts, anecdotal information was varied. Contacts in the New York district were expecting future price increases over the next several months. Atlanta contacts remarked on a shift in consumer spending, as previous allocations to discretionary items were offset by higher rent, fuel and food costs. In Dallas, the Eleventh District noted an increased rig count while hampered by lingering supply chain and labor constraints. The San Francisco district commented that increased uncertainty over high inflation was expected to lead to a pullback in retail sales. And the St. Louis district reported a spike in plumbing and roofing materials but a decline in lumber prices.
As the Federal Reserve plans to meet and determine its next policy move, the content of this report is closely examined. Watch this space.