Amid ongoing Congressional testimony by Federal Reserve Chair Jerome Powell on Wednesday, the central bank also released its Beige Book, a compilation of anecdotal evidence on economic conditions in each of the twelve Fed districts.<\/p>\n
The Beige Book noted the U.S. economy<\/span> strengthened further from late May to early July, with the pace of growth described as moderate to robust.<\/p>\n The transportation, travel and tourism, manufacturing, and non-financial services sectors reported above-average growth, while energy markets<\/span> improved slightly, and agriculture had mixed results.<\/p>\n The report said supply-side disruptions became more widespread during the period, including shortages of materials and labor, delivery delays, and low inventories of many consumer goods.<\/p>\n Powell told the House Financial Services Committee that production bottlenecks and other supply constraints in certain sectors have contributed to a notable increase in inflation, with the Beige Book noting prices have increased at an above-average pace.<\/p>\n The Beige Book described pricing pressures as broad-based, with more acute pricing pressures seen in the hospitality sector, as the reopening of hotels and restaurants confronted limited supplies of materials and workers.<\/p>\n “While some contacts felt that pricing pressures were transitory, the majority expected further increases in input costs and selling prices in the coming months,” the Fed said.<\/p>\n The report also said three-quarters of the Fed districts reported either slight or modest job gains, while the remainder reported moderate or strong increases in employment.<\/p>\n Labor shortages were often cited as a reason firms could not staff at desired levels, the Beige Book said, with firms in several districts expecting the difficulty finding workers to extend into the early fall.<\/p>\n Looking ahead, the Beige Book said the outlook for demand continued to improve but noted many contacts expressed uncertainty or pessimism over the easing of supply constraints.<\/p>\n The release of the Beige Book comes two weeks ahead of the Fed’s next monetary policy meeting, which is scheduled for July 27-28. <\/p>\n