The Federal Reserve released a report on Wednesday saying overall U.S. economic activity has expanded slightly since late February.
The Fed’s Beige Book, a compilation of anecdotal evidence on economic conditions in each of the twelve Fed districts, said ten out of twelve districts experienced either slight or modest economic growth.
While the other two districts reported no changes in activity, the number of districts reporting slight or modest economic growth is up from eight in the previous report.
In contrast to recent upbeat retail sales data, the Fed said consumer spending has barely increased overall but acknowledged reports were quite mixed across districts and spending categories.
The report said several reports mentioned weakness in discretionary spending, as consumers’ price sensitivity remained elevated.
Expanding on the issue of inflation, the Beige Book said price increases were modest, on average, running at about the same pace as in the last report.
The Fed said disruptions in the Red Sea and the collapse of Baltimore’s Key Bridge have so far not led to widespread price increases, but several districts noted moderate increases in energy prices and sharp increases in insurance rates.
“Another frequent comment was that firms’ ability to pass cost increases on to consumers had weakened considerably in recent months, resulting in smaller profit margins,” the Fed said.
On the labor market front, the Beige Book said employment rose at a slight pace overall, with nine districts reporting very slow to modest increases and the remaining three reporting no changes in employment.
Wages grew at a moderate pace in eight districts, while the remaining four noted only slight to modest wage increases, the Fed added.
The Beige Book is typically released two weeks ahead of the Fed’s next monetary policy meeting, with the next meeting scheduled for April 30-May 1.
CME Group’s FedWatch Tool currently indicates a 99.5 percent the Fed will leave interest rates unchanged at the meeting.
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