Inflationary pressures remained widespread, although price increases have been moderate in many districts, according to reports from businessmen consulted by the Federal Reserve (Fed, the US central bank) for the Beige Book.
The document, released this Wednesday (8), is a kind of summary of the country’s economic conditions and serves as the basis for monetary policy decisions by the BC of the United States.
According to the document, it was observed that input costs increased even more in several districts, mainly in relation to energy and raw materials, despite a reduction in freight being reported. Still, the price increase has moderated in many districts.
Activity
US economic activity grew slightly in early 2023, according to the Beige Book.
The report points out that six districts reported little or no change in economic activity since the last report, while the other six indicated growth at a moderate pace.
However, the Fed also points out that bottlenecks in the production chain continued to ease over the same period.
According to the document, consumer spending remained stable, although inflation and high interest rates continue to reduce discretionary income and purchasing power in several districts. Some contacts raised concerns about rising credit card debt.
The Beige Book also reveals that demand for loans has declined, credit standards have tightened and default rates have risen.
Amidst increased uncertainty, the contacts interviewed do not expect an improvement in US economic conditions in the coming months.
Job market
The Beige Book points out that the job market remains solid in the US and that employment continues to increase at a modest to moderate pace, “despite the hiring freeze by some companies and scattered reports of layoffs”.
According to the publication, wages grew at a moderate pace, with less wage pressures in some districts, and the forecast is for more moderation in 2024.
Labor availability improved “slightly”, “although finding workers with the desired skills or experience remained a challenge”.
Source: CNN Brasil
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