MNI:Beige Book Summary:Growth Moderate; Trade Concerns-Text>

--Report Prepared by the New York Federal Reserve Bank

--Responses Collected On Or Before August 31, 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 

     Reports from the Federal Reserve Districts suggested that the 

economy expanded at a moderate pace through the end of August. Dallas 

reported relatively brisk growth, while Philadelphia, St. Louis, and 

Kansas City indicated somewhat below average growth. Consumer spending 

continued to grow at a modest pace since the last report, and tourism 

activity expanded, to varying degrees, across the nation. Manufacturing 

activity grew at a moderate rate in most Districts, though St. Louis 

described business as little changed and Richmond reported a decline in 

activity. Transportation activity expanded, with a few Districts 

characterizing growth as robust. Home construction activity was mixed 

but up modestly, on balance. However, home sales were somewhat softer, 

on balancein some cases due to reduced demand, in others due more to 

low inventories. Commercial real estate construction was also mixed, 

while both sales and leasing activity expanded modestly. Lending 

activity grew throughout the nation. Some Districts noted weakness in 

agricultural conditions. Businesses generally remained optimistic about 

the near-term outlook, though most Districts noted concern and 

uncertainty about trade tensionsparticularly though not only among 

manufacturers. A number of Districts noted that such concerns had 

prompted some businesses to scale back or postpone capital investment. 

Employment and Wages

     Labor markets continued to be characterized as tight throughout the 

country, with most Districts reporting widespread shortages. While 

construction workers, truck drivers, engineers, and other high-skill 

workers remained in short supply, a number of Districts also noted 

shortages of lower-skill workers at restaurants, retailers, and other 

types of firms. Employment grew modestly or moderately across most of 

the nation, though Dallas noted robust job growth, while three Districts 

reported little change that partly reflected a dearth of applicants. Six 

of the twelve Districts cited instances in which labor shortages were 

constraining sales or delaying projects. Wage growth was mostly 

characterized as modest or moderate, though a number of Districts cited 

steep wage hikes for construction workers. Some Districts indicated that 

businesses were increasingly using benefitssuch as vacation time, 

flexible schedules, and bonuses to attract and retain workers, as well 

as putting more resources into training. 

Prices

     Prices of final goods and services continued to rise at a modest to 

moderate pace in most Districts, though there were some signs of a 

deceleration. All Districts noted fairly widespread input price 

pressures, particularly for construction materials and freight 

transportation. Tariffs were reported to be contributing to rising input 

costs, mainly for manufacturers. Businesses input costs have generally 

been rising more rapidly than selling prices, though there have been 

increased efforts to pass along cost hikes to customers. A few Districts 

noted some increase in inflation expectations.

Highlights by Federal Reserve District

Dallas

     Economic activity expanded at a solid pace. Manufacturing and 

service sectors sustained a healthy pace of growth, while activity in 

the housing and energy sectors was flat to down. Retail spending 

accelerated, as did loan demand. Wages and other input costs rose, but 

firms ability to pass these increases on to customers was limited. 

Philadelphia

     Economic activity continued to expand at a modest pace. With tight 

labor markets, wages grew moderately despite incremental job growth. On 

balance, contacts continued to observe modest price increases but 

expressed growing concern for future inflation. Notably, manufacturing 

slowed to a modest pace of growth, and nearly twothirds of the 

manufacturers reported rising prices paid. 

Cleveland

     The District economy grew at a moderate pace. Labor markets 

tightened, and wage pressures were noted broadly. Cost pressures among 

manufacturers and construction firms continued, especially for metals, 

construction materials, and transportation. Stronger confidence in the 

economy boosted demand in nonfinancial services and the retail sector. 

Construction activity weakened. 

Richmond

     The regional economy grew moderately in recent weeks. Port and 

transportation activity remained robust. Business travel and tourism was 

also strong throughout the Fifth District. Meanwhile, manufacturers gave 

mixed accounts as some firms were unable to pass along higher input 

prices. Labor demand strengthened, and employers continued to report 

difficulties finding qualified workers. Prices grew moderately, overall. 

Atlanta

     The Sixth District economy expanded at a moderate pace. Labor 

markets remained tight, and wage pressures increased for some firms. 

Most nonlabor input costs were stable. Retail sales improved further. On 

balance, the pace of nonresidential construction was flat compared with 

year-earlier levels, while residential construction activity was up. 

Manufacturing activity continued to grow. 

Chicago

     Growth picked up to a moderate pace. Manufacturing production and 

employment grew moderately, consumer and business spending increased 

modestly, and construction and real estate activity was up slightly. 

Wages and prices rose modestly, and financial conditions improved 

slightly. Overall crop yields appeared set to forge a new record 

St. Louis

     Economic conditions improved slightly. Labor market conditions 

remained tight, and wage growth was modest. Manufacturers facing higher 

input prices reported passing those costs along to their customers. 

Agriculture contacts estimated that the majority of the soybean crop has 

not yet been priced, leaving farmers exposed to current market 

conditions. 

Minneapolis

     Ninth District economic activity expanded moderately. Employment 

grew strongly, despite continued labor constraints. Hiring demand was 

robust, and wage growth was moderate to strong. Price pressures 

increased moderately overall. Manufacturing activity increased, but 

contacts in manufacturing and agriculture remained concerned about 

negative impacts from trade restrictions. Summer tourism grew moderately 

overall. 

Kansas City

     Economic activity expanded modestly in late July and August, 

including gains in consumer spending, manufacturing, wholesale trade, 

transportation, high-tech, and professional services. Manufacturing 

contacts noted that recent trade developments had led to higher input 

prices and lower capital spending plans for some firms. Prolonged 

weaknesses in the agricultural sector were increasingly impacting farm 

borrower finances. 

San Francisco

     Economic activity in the Twelfth District continued to expand at a 

moderate pace. Conditions in the labor market tightened further, and 

price inflation increased moderately. Sales of retail goods picked up 

moderately, and activity in the consumer and business services sectors 

edged down slightly. Activity in the manufacturing sector expanded 

modestly. Activity in residential and commercial real estate markets was 

solid. Lending activity ticked up modestly. 

     --MNI Washington Bureau;tel: +1 202 371-2121                       

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