Breaking News
Ad-Free Version. Upgrade your experience. Save up to 40% More details

U.S. economy ambles on but few signs of inflation pressures: Fed

EconomyMay 31, 2017 02:10PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
© Reuters. Clouds over the Federal Reserve in Washington

WASHINGTON (Reuters) - The U.S. economy expanded at a modest to moderate pace from early April through late May but showed little sign of breaking out of a recent trend of sluggish inflation, a survey conducted by the Federal Reserve showed on


"On balance, pricing pressures were little changed from the prior report," the central bank said in its Beige Book report of the economy derived from anecdotal evidence provided by business contacts nationwide.

The Fed has begun to quicken the pace of interest rate hikes on an improving economy after years of rates held near zero in the aftermath of the financial crisis. The U.S. unemployment rate - currently at 4.4 percent - is at a near 10-year low.

Policymakers raised rates in December 2015 and again a year later, and have forecast three rate hikes in 2017. They raised rates in March and could do so again as early as their next policy meeting in two weeks time.

Influential Fed Governor Lael Brainard said on Tuesday a rate rise "likely will be appropriate soon," although she and some other Fed officials remain concerned about stilted progress on inflation meeting the Fed's 2 percent target rate in recent months.

The majority of the Fed's 12 districts reported that firms expressed positive near-term outlooks despite a recent softening in consumer spending.

Labor markets also continued to tighten with both employment and wages growing at a modest to moderate pace. As has been reported in the Beige Book for months, firms with the most acute labor shortages raised wages the most.

That trend still did not for the most part feed into inflation, however. Rapidly rising costs for some commodities such as lumber and steel "tended to push input costs higher for some manufacturers and the construction sector," the Fed said, but "in contrast, some districts noted falling prices for certain final goods, including groceries, apparel and autos."

Energy prices and farm prices were also mixed.

In the Boston Fed district, for example, "Price pressures continued to be modest. The outlook remained positive, with a bit of added caution."

The U.S. economy grew sluggishly in the first quarter but recent data point to an acceleration in the second quarter.

Consumer spending recorded its biggest increase in four months in April, data showed on Tuesday.

The Beige Book was compiled by the Philadelphia Fed with information collected on or before May 22.

U.S. economy ambles on but few signs of inflation pressures: Fed

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email