**MNI 5 THINGS:Beige Book:US Labor Mkt Conditions Still Tight>

--Five Things We Learned From the May 30 Beige Book

By Sara Haire, Holly Stokes, and Kevin Kastner

     WASHINGTON (MNI) - The following are the key points from the 

Beige Book compiled by the Federal Reserve Bank of Cleveland through 

May 21, 2018: 

     - Labor markets continued to be tight across the country with firms 

noting difficulty filling positions across "all skill levels." 

Employment in most districts rose modestly to moderately, with Dallas 

being the exception where "solid and widespread" growth in employment 

was reported. Despite the tight labor market, in the aggregate, "wage 

increases remained modest in most districts." However, many firms have 

noted that they have increased wages and compensation packages to combat 

labor shortages in their sector. In the coming months, some contacts 

expect similar employment and wage gains. 

     - No sign of a rampant acceleration in inflation, with most 

districts citing that prices "rose moderately," while the rest reported 

only slight or modest increases. Several reports of material and input 

costs surfaced through the districts. The rise in input prices 

accompanied by the labor shortage in some sectors has put upward 

pressure on prices in the transportation, construction, and 

manufacturing sectors. 

     - Overall economic activity expanded moderately across all firms in 

late April and early May with "few shifts in the pattern of growth." The 

exception being Dallas where economic activity reportedly sped up to a 

"solid pace," the Beige Book reported. While contacts did voice concern 

over the uncertainty of future trade policy, the outlooks for growth in 

the near term were "generally upbeat." 

     - More than half of the districts reported a pickup in industrial 

activity, while a third of the districts classified activity as 

"strong," suggesting the manufacturing sector is on the rise, especially 

noted in Dallas. Despite upticks in production, consumer spending "was 

soft," with nonauto retail sales growth moderating while auto sales were 

flat, however it did vary by district and vehicle type, the Beige Book 

said. 

     - Despite consumer spending being reportedly "soft," the demand for 

loans continued to tick higher causing competition to push deposit rates 

higher. Delinquency rates were mostly stable at low levels. 

     ** MNI Washington Bureau: 202-371-2121 ** 

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