Beige Book: Economic Activity Expanding at a Modest to Moderate Pace

Economic activity continued to expand at a modest to moderate pace across the twelve Federal Reserve Districts in June, according to the just-released Federal Reserve Beige Book. The report was based on information collected through August 28.

Consumer spending increased in most Districts this period, particularly in nonauto retail sales and tourism. Reports in auto production were mixed, and many Districts expressed concern about a prolonged slowdown in the auto industry. Manufacturing expanded modestly on balance. Agricultural conditions were mixed as regions reported drought conditions. Energy and natural resources activity was generally positive prior to Hurricane Harvey, which caused shutdowns in the Gulf Coast.

Employment slowed somewhat in most Districts, expanding at a slight to modest rate. Labor markets once again remained tight, and employers in most Districts continued to report greater difficulty attracting and retaining qualified workers. The manufacturing and construction industries in particular noted a worker shortage.

Modest to moderate wage growth was seen in most Districts. The Dallas and San Francisco regions signified that the tight labor market was pushing up wages, though the other districts reported little wage pressure. Prices increased modestly across the country. Several Districts reported higher materials costs, most notably for freight, lumber and steel. Energy and agricultural commodity prices, however, were mixed across the Districts.

Read the full Federal Reserve report.