MNI BRIEF: Fed Contacts Report Modest Price Growth-Beige Book
Business contacts of regional Fed banks say consumers are pushing back against additional price increases.
The U.S. economy and labor market continued growing at a slight to modest pace in recent weeks while prices increased at a modest pace, according to the Federal Reserve's May Beige Book report published Wednesday.
"National economic activity continued to expand from early April to mid-May; however, conditions varied across industries and Districts. Most Districts reported slight or modest growth, while two noted no change in activity," the report said, noting retail spending was flat to up slightly, reflecting lower discretionary spending and heightened price sensitivity among consumers. "Employment rose at a slight pace overall" while "wage growth remained mostly moderate."
"Prices increased at a modest pace over the reporting period," the May report stated. "Contacts in most Districts noted consumers pushed back against additional price increases, which led to smaller profit margins as input prices rose on average. Retail contacts reported offering discounts to entice customers." (See: MNI: Fed's Beige Book Points To Return To Pricing Normality)