MNI BRIEF: Fed Beige Book Cites Economic Slowdown Concerns

The U.S. economy and labor market weakened in recent weeks while price pressures showed hints of moderating, according to the Federal Reserve Beige Book report published Wednesday.

"National economic activity expanded modestly on net since the previous report; however, conditions varied across industries and Districts," the minutes said. "Four districts noted flat activity and two cited declines, with slowing or weak demand attributed to higher interest rates, inflation, and supply disruptions."

The report added that "several districts reported a cooling in labor demand, with some noting that businesses were hesitant to add to payrolls amid increased concerns of an economic downturn," and that "looking ahead, expectations were for price increases to generally moderate."

Atlanta Fed economist Brent Meyer told MNI last week the latest CPI figures suggest inflation is becoming entrenched and former Fed officials now see fed funds peaking at 5% or above after the latest upside surprise on inflation.