Highlights of the Fed report

  • Outlook for demand improved further but many contacts uncertain about the easing of supply constraints
  • Wages increased at a moderate pace on average and low wage workers enjoyed above-average pay increases
  • Healthy labor demand as broad based but strongest for low-wage workers
  • Firms in several districts expected difficulty in finding workers into the Fall
  • Lending activity increased slightly or modestly in most districts
  • While some contacts felt that pricing pressures were transitory, the majority expected further increases in input costs and selling prices in the coming months
  • Pricing pressures were broad-based
  • Pricing power was mixed, as some contacts reported that high end-user demand enabled them to increase their prices and others said that input price pressures had reduced their profit margins
  • Full text

This line has to be worrisome for the Fed:

"While some contacts felt that pricing pressures were transitory, the majority expected further increases in input costs and selling prices in the coming months.