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--For Beige Book Released Wed, Ahead of March 20-21 FOMC Meeting 
By Jean Yung
     WASHINGTON (MNI) - The following are the key points from the 
Beige Book compiled by the Federal Reserve Bank of San Francisco through 
Feb. 26: 
     -Anecdotal evidence of a pick-up in inflation should give Fed 
officials confidence to push ahead with tightening this year. Business 
contacts reported prices increasing in all districts, with most areas 
noting "moderate inflation." Firms in four Fed districts saw a "marked 
increase" in steel prices, due in part to a decline in foreign 
competition. Price growth for building materials rose due to an uptick 
in construction activity while higher fuel costs drove moderate 
increases in transportation costs. 
     -Firms in a few districts reported handing out modest increases in 
compensation following Congress's tax overhaul but many said it was too 
soon to determine the effect of the new tax code on capital investment. 
One large retailer in the Boston Fed district planned to pass along half 
its tax savings to workers in the form of higher wages, while firms in 
the Minneapolis district reported a number of one-time bonuses. 
     -Labor markets remained tight, reflecting a low unemployment rate. 
Firms in most districts reported raising wages and expanding benefit 
packages in response to "persistent labor market tightness" and "brisk 
demand for qualified workers," the Beige Book said. 
     -Economic activity expanded at a modest to moderate pace across 
all 12 Fed districts in January and February. Consumer spending was 
mixed with auto sales flat or declining in every district. Loan volumes 
were generally flat. Manufacturers saw a broad-based increase in 
production. Energy and mining activity in the Minneapolis district was 
robust. 
     -A shortage of labor and materials continued to constrain the 
construction sector even as building activity expanded. Low inventories 
continued to plague the residential real estate market, dragging down 
sales, while conditions in commercial real estate improved moderately 
since the end of 2017. Commercial rents in and around New York City were 
up significantly, the Beige Book said. 
     ** MNI Washington Bureau: 202-371-2121 ** 
[TOPICS: MAUDS$,M$U$$$,MAUDR$,MT$$$$,MMUFE$]

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