The Beige Book of the Federal Reserve revealed that overall price pressures in 12 Fed districts increased further since the last report, according to Reuters.
Featured statements
“The national economy expanded at a moderate rate from the beginning of April to the end of May, a somewhat faster rate than in the previous reporting period.”
“Staffing levels increased at a relatively constant rate, with two-thirds of the districts reporting modest job growth during the reporting period and the remainder indicating that gains in employment were moderate.”
“As the spread of COVID-19 continued to slow, job growth was strongest in food services, hospitality and retail.”
“Sales prices increased moderately, while input costs increased more rapidly.”
“Overall expectations changed little from April’s Beige Book, with optimistic contacts that economic growth will remain strong.”
“Input costs have continued to rise across the board, and many contacts noted sharp increases in the prices of construction and manufacturing raw materials.”
“There were also increases in the prices of freight, packaging and petrochemicals.”
“Contacts reported that continued supply chain disruptions intensified cost pressures.”
“The effects of vaccination rates are most notable in consumer spending.”
“Strengthening demand allowed some companies, particularly manufacturers, builders and transportation companies, to pass on much of the cost increases to their customers.”
“Going forward, the contacts anticipate facing cost increases and charging higher prices in the coming months.”
“It was still difficult for many companies to hire new workers, especially low-wage hourly workers, truck drivers and skilled tradesmen.”
“The lack of job candidates prevented some companies from increasing production and, less frequently, led some companies to reduce their hours of operation.”
“Overall, wage growth was moderate and a growing number of companies offered signing bonuses and increased starting wages to attract and retain workers.”
“Contacts expected labor demand to remain strong but supply restricted in the coming months.”
“Factory production increased even further, despite significant supply chain challenges.”
“Strong demand for homes outpaced the capacity of home builders, leading some to limit sales.”
“Demand for business services increased moderately; demand for transportation services was exceptionally strong.”
Market reaction
This publication does not appear to have an immediate impact on the performance of the USD against its main rivals. At time of writing, the US Dollar Index was virtually unchanged on the day at 89.92.
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