The economy strengthened further from May to early July, displaying moderate to robust growth with bank lending activity increasing slightly or modestly in most parts of the country, according to the Federal Reserve’s fifth Beige Book release of the year. The report was based on information collected through July 2.
Prices increased at an above-average pace with a majority of districts reporting strong price growth, while the rest saw moderate gains. Pricing pressures were broad-based, especially in the hospitality sector, as reopening hotels and restaurants contended with fewer workers and limited supplies of materials.
Wages increased at a moderate pace on average, and low-wage workers enjoyed above-average pay increases. Healthy labor demand was broad-based, but was seen as strongest for low-skilled positions. Meanwhile, supply-side disruptions—including delivery delays and low inventories of many consumer goods—became more widespread, the Fed noted.