Economic activity increased, slightly to moderately, in 10 to 12 Federal Reserve districts since early July through August, the agency said Wednesday in its latest semi-monthly report on economic conditions.
However, the Beige Book also noted, although the general economic outlook was positive, contacts in the Fed’s district reported “reporting heightened uncertainty surrounding the effects of higher energy prices, policy, and international conflict.”
The report stated that auto sales were mostly subdued during the reporting period. It said the sales were “dampened by downbeat consumer confidence, high fuel prices, and rising financing costs.” Manufacturing activity, by contrast, expanded in most districts, the Fed said. Some contacts highlighted “strength in demand for defense and data center-related orders.”
That was reflected in building projects – at least for data center projects, where the Fed report found a “high concentration of activity.” Residential construction, however, declined.
Prices were up in all 12 districts, according too the report – with eight districts reporting moderate increases and one “robust increases.” The others were limited to modest or slight increases. “Compared with the previous reporting period, the pace of price increases was the same in eight districts, decreased in three, and increased in one,” the report stated.
Among the leaders in price increases, the report indicates, were health care and insurance costs, which the report described as “significant.”
“Consumer-facing contacts in a few Districts noted that heightened price sensitivity among customers was putting a limit on their ability to pass through input price increases,” the report stated.
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