Fed’s Beige Book: Economy continued to expand at modest-to-moderate pace

Highlights of the Fed’s Beige Book

• Fed sees only modest wage gains in most districts with businesses turning to automation and more training to deal with shortfalls
• Businesses in manufacturing, agriculture, transport and other sectors ‘expressed concern’ about newly imposed and proposed tariffs
• Modest-to-moderate across all districts
• Widespread reports of higher steel prices due to new tariffs
• Employment growth continued with labor markets described as tight across the country and shortages in high-skill positions, construction and transportation
• Prices increased across all districts, generally at a moderate pace
• Building materials prices especially have been rising
• The prior release was March 7. Here were the highlights
• Full text

A bit of caution on wage growth. The big question going ahead is whether the Fed wants to wait-and-see on inflation or continue to act first.

Here is the full summary on employment and wages:

“Widespread employment growth continued, with most Districts
characterizing growth as modest to moderate. Labor markets across the
country remained tight, restraining job gains in some regions. Contacts
continued to note difficulty finding qualified candidates across a broad
array of industries and skill levels. Reports of labor shortages over
the reporting period were most often cited in high-skill positions,
including engineering, information technology, and health care, as well
as in construction and transportation. Businesses were responding to
labor shortages in a variety of ways, from raising pay to enhancing
training to increasing their use of overtime and/or automation, among
other strategies. Upward wage pressures persisted but generally did not
escalate; most Districts reported wage growth as only modest.”