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WASHINGTON (MNI) - The following are compiled excerpts from the
Federal Reserve's report on Current Economic Conditions, known as
The Beige Book, released Wednesday:
"Contacts in a few Districts conveyed reports of modest increases
in compensation following passage of the Tax Cuts and Jobs Act."
"Some firms reported that the Tax Cut and Jobs Act is enabling them
to increase investment and raise worker pay."
"The tough competition for workers led employers to raise wages
during the survey period, especially for lower-wage jobs. Contacts
speculated that savings resulting from the Tax Cuts and Jobs Act (TCJA)
will, in part, support pay increases over the short to medium terms.A
few bankers expect to raise minimum pay to $15 per hour within the next
year or two.However, few contacts expect the tax cuts to lead to more
robust hiring. Rather, firms expect to maintain their recent hiring pace
over the short term."
"One large retailer planned to pass along half its savings from the
corporate tax cut to selected workers in the form of higher wages, while
a smaller retailer said it planned to raise salaries a bit to match the
wage increases announced by some prominent retail chains as a result of
the tax cuts. "
(Retail and Tourism) "One contact said that the cut in federal
income taxes and actual or expected wage gains augur well for the retail
(Manufacturing) "Contacts said that it was too soon to determine
the effect of the new tax code on capital spending."
"Respondents across the First District voiced concerns that
commercial property values could fall in response to rising yields on
long-term Treasuries, and cited both upside and downside risks related
to recent changes in federal tax laws and the recently signed federal
"Wage pressures were moderate since the last report. A number of
one-time bonuses were reported, stemming from recent changes in federal
tax policy. Several contacts, including a Montana banker, also said
raises were more likely because tax reform provides a way to pay for
increased wages without increasing prices or reducing profits. A
Minnesota construction contractor said wages are going up because we
are seeing an increase in productivity. A Montana ski resort contact
said that tax savings would allow the company to raise wages, and a
Montana construction contact believed tax changes would provide a
sizable, single-step increase in wages. However, a number of public
union contracts covering South Dakota county employees, Minnesota and
Wisconsin state employees, and higher education service workers in
Minnesotaall settled for increases of 2 percent or less."
(Manufacturing) "Outlooks overall remained highly positive, with
contacts citing tax reform and a lower dollar as tailwinds, and rising
interest rates and inflation as potential headwinds."
--MNI Washington Bureau;tel: +1 202 371-2121
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