WASHINGTON — The Federal Reserve's latest Beige Book published Wednesday noted that rising materials and shipping costs due in part to tariffs as well as difficulty finding qualified workers remain among the top concerns for businesses across the country.
Andrew Harrer/Bloomberg
The report, an anecdotal review of the state of the economy over the past six weeks, showed a modest to moderate expansion across most Fed districts. The exceptions were: The Dallas district reported robust growth driven by manufacturing activity, while New York and St. Louis saw slight growth.
Here are some key points from the Beige Book, compiled by the Federal Reserve Bank of Richmond with data through Oct. 15, 2018:
- The economy overall appeared to slow a tad from the "moderate" pace reported in the last Beige Book. Manufacturers saw moderate growth but said they continued to face rising input and shipping costs and a shortage of qualified workers. Consumer spending increased modestly while commercial and residential real estate was mixed with some reports of rising home prices and low inventory.
- Prices of final goods and services grew at a "modest to moderate pace" across most regions as manufacturers raised prices to keep pace with higher input prices, which they blamed on tariffs. Energy firms said they reorganized supply chains as a result of the tariffs. Some retailers and wholesalers raised prices as transportation costs rose and also "worried about impending cost increases resulting from tariffs." A number of firms cited concerns over trade tensions and some are delaying capital spending while waiting out the uncertainty.
- The labor market remained tight, with most districts seeing widespread shortages for both higher-skilled and lower-skilled workers. Employment grew "modestly or moderately" across most of the country, with some firms reporting the labor shortage constraining growth.
- Wage growth continued to be "modest to moderate" with an unchanged outlook though there were gains for sectors like construction where labor shortages exist. Some businesses offered bonuses, more vacation or flexible work schedules in lieu of higher wages to attract and retain workers.
