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Beige Book Summary: Growth Moderate/Modest; Dallas Strong-Text>

--Report Prepared by the Boston Federal Reserve Bank
--Responses Collected Before July 9, 2018
     WASHINGTON (MNI) - The following is an excerpt from the summary of 
the Federal Reserve's report on Current Economic Conditions, known as 
The Beige Book, released Wednesday
Overall Economic Activity 
     Economic activity continued to expand across the United States, 
with 10 of the 12 Federal Reserve Districts reporting moderate or modest 
growth. The outliers were the Dallas District, which reported strong 
growth driven in part by the energy sector, and the St. Louis District 
where growth was described as slight. Manufacturers in all Districts 
expressed concern about tariffs and in many Districts reported higher 
prices and supply disruptions that they attributed to the new trade 
policies. All Districts reported that labor markets were tight and many 
said that the inability to find workers constrained growth. Consumer 
spending was up in all Districts with particular strength in Dallas and 
Richmond. Contacts reported higher input prices and shrinking margins. 
Six Districts specifically mentioned trucking capacity as an issue and 
attributed it to a shortage of commercial drivers. Contacts in several 
Districts reported slow growth in existing home sales but were not 
overly concerned about rising interest rates. Commercial real estate was 
largely unchanged. 
Employment and Wages 
     Employment continued to rise at a modest to moderate pace in most 
Districts. Labor markets were described as tight, with most Districts 
reporting firms had difficulty finding qualified labor. Shortages were 
cited across a wide range of occupations, including highly skilled 
engineers, specialized construction and manufacturing workers, IT 
professionals, and truck drivers; some Districts indicated labor 
shortages were constraining growth. Districts noted firms were adding 
work hours, strengthening retention efforts, partnering with local 
schools, and converting temporary workers to permanent, as well as 
raising compensation to attract and retain employees. On balance, wage 
increases were modest to moderate, with some differences across sectors; 
a couple of Districts cited a pickup in the pace of wage growth. 
     Prices increased in all Districts at a pace that was modest to 
moderate on average; reports showed upticks in inflation in several 
Districts. The prices of key inputs rose further, including fuel, 
construction materials, freight, and metals; a few Districts described 
these input price pressures as elevated or strong. Tariffs contributed 
to the increases for metals and lumber. However, the extent of 
pass-through from input to consumer prices remained slight to moderate. 
Movements in agricultural commodities prices were mixed across products 
and Districts. Pricing pressures are expected to intensify further 
moving forward in some Districts, while in others the outlook is for 
stable price increases at a modest to moderate pace. 
--MNI Washington Bureau;tel: +1 202 371-2121                       
[TOPICS: MMUFE$,M$U$$$]                              

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