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The Federal Reserve released it's Biege Book Wednesday with the focus on wages and labor markets. The labor market continues to confound the bankers as despite a tight labor market restraining growth wage pressure remains modest. The Fed wants to see wage pressures to pressure prices and inflation. 

This report was prepared at the Federal Reserve Bank of Boston based on information collected on or before July 9, 2018. 

Fed Boardroom

The Fed found that 11 of 12 regions of the country were growing at a “modest” pace or even faster. Only the states around St. Louis reported “slight” growth. “Economic activity continued to expand across the United States,” the Fed stated.

“Shortages were cited across a wide range of occupations, including highly skilled truck drivers, specialized construction and manufacturing workers, IT professionals and truck drivers,” the Beige Book said. Truck drivers are especially scarce.

Federal Reserve Chairman Jerome Powell also testified before the Banking Housing and Urban Affairs of the US Senate Tuesday and the House Wednesday.

This document summarizes comments received from contacts outside the Federal Reserve System and is not a commentary on the views of Federal Reserve officials.

Summary of Economic Activity

First District economic activity continued to expand at a moderate pace, with nearly all responding retailers, manufacturers, hospitality providers, and software and IT firms citing year-over-year increases in sales and revenues in recent weeks. Residential real estate markets saw price increases but fewer closed sales although contacts reported higher listings and expected higher sales in the future. Commercial real estate markets were generally expanding, although growth in retail was mixed. Hotels reported slower growth which they attributed to the expansion of on-line short term rentals. Contacts across a range of industries said trucking capacity continued to be a major issue. Overall, the outlook continued to be positive. Contacts expressed concerns about tariffs but none cited trade issues as affecting demand or hiring and capital expenditure plans.

Highlights of July 2018 Beige Book

Growth and Tariffs

  • Manufacturers across US expressed concern on tariffs
  • Sight to moderate tariffs caused disruptions,
  • Several districts reported slow growth in existing home sales
  • Were not overly concerned about rising interest rates
  • Spending was up in all districts with particular strength in Dallas, Richmond 

Wages & Labor Market

  • All districts report tight labor markets,
  • Employment, wage gains were modest to moderate 
  • Inability to find workers hurt growth in many districts
  • Faster wage growth seen in a couple of districts


  • Higher spending pass-through to consumer prices
  • Higher prices in many districts \
  • Businesses report higher input prices, shrinking margins
  • Price increases in all districts
  • Few districts described input price pressures 


Source : Beige Book July 18 2018

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