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 September through early October, according to the just-released Federal Reserve Beige Book. The report was based on information collected through October 6. As expected, the Atlanta, Dallas and Richmond Districts each reported major disruptions from Hurricanes Harvey and Irma in some areas and sectors.

Consumer spending increased in most Districts this period, particularly in vehicle sales and tourism. Retail spending rose slowly. Residential construction rose as home inventory levels continue to constrain residential sales in many areas. Manufacturing and nonfinancial services expanded modestly to moderately in most Districts. Agricultural conditions were mixed as some regions reported better-than-expected harvests but low commodity prices.

Employment was modest on balance, reporting flat to moderate increases in most Districts. Labor markets once again remained tight, and employers in most Districts continued to report greater difficulty attracting and retaining qualified workers. The construction, transportation and skilled manufacturing industries in particular noted a worker shortage.

Modest to moderate wage growth was seen in most Districts. Some districts reported wage pressures in certain sectors, including transportation and construction. The report noted growing use of sign-on bonuses, over-time and other nonwage incentives to attract and retain workers. Prices increased modestly across the country. Several Districts reported higher manufacturing input costs, but these increases were not seen in the selling prices. Transportation, energy and construction materials prices increased rapidly, partially due to the effects from Hurricanes in some Districts.

Read the full Federal Reserve report.