By Yali N’Diaye

(MNI) – The Federal Reserve’s latest survey of conditions around
the country, released Wednesday, showed that while economic activity
continued to grow, “many districts” reported a moderation, compared with
the “few” that had reported “some deceleration” in June.

The “Beige Book,” based on what business and banking contacts told
the 12 Federal Reserve Banks through July 15, also showed that wage
pressures remained “subdued” amid “soft” labor market conditions.

In fact, overall, “Price pressures moderated somewhat in many
Districts, although some firms indicated that they were able to pass on
some cost increases to their customers.”

And the upward pressures from supplier prices were reported by half
of the districts.

The survey findings were summarized by the Philadelphia Fed and
will be reviewed by Fed policymakers at their next Federal Open Market
Committee meeting on August 9.

Despite “modest hiring increases” in most districts keeping wage
pressured subdued, consumer spending increased, the Beige Book reported.

The report noted that over the period covered, gasoline prices
declined, leading to “some additional spending” as it encouraged
shopping trips.

Auto sales, on the other hand, “slowed a little”, the report said,
“with inventories still lean due to Japanese supply chain disruptions.”

Along with consumer spending, “manufacturing activity expanded
overall,” the Beige Book added, with the outlook remaining “generally
optimistic” despite cautious capital spending plans.

In other sectors, residential activity was little changed — “and
remained weak” — while the residential rental market improved further.

In banking and finance, “Reports of loan demand were more mixed
than in the previous Beige Book” although credit quality was steady to
improving and credit conditions were “little changed.”

Interestingly, however, the New York district reported there was no
credit standard tightening for the first time in years.

In other findings, tourism activity and nonfinancial services
improved, and energy “remained strong.”

Still, overall, signs of growth slowdown widened.

Regionally, “The six Districts nearest the Atlantic seaboard
reported a slowdown in activity since the previous Beige Book report;
activity was little changed in the Atlanta District and unchanged or
slightly improved in the Richmond District. Of the other six Districts,
the Minneapolis District reported political and weather-related
disruptions that temporarily slowed growth, and the Dallas District
slowed to a moderate pace of growth,” the report said. “The remaining
four Districts continued to grow modestly.”

“The previous Beige Book reported a slower growth rate for four
Districts, seven Districts growing at a steady pace, and one District
with faster growth.”

** Market News International **

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