MNI BRIEF:Labor and Supply Shortages Temper Beige Book Outlook

Supply disruptions and widespread labor shortages slowed economic growth in July and August, while consumers also pulled back on dining out, travel and tourism as the Delta variant spread, according to the Fed's Beige Book report on Wednesday.

Growth "downshifted slightly to a moderate pace" in the two summer months, the Fed said. Firms noted strong demand both for workers and goods and raised prices and wages but still had trouble sourcing key inputs.

"Businesses in most Districts remained optimistic about near-term prospects, though there continued to be widespread concern about ongoing supply disruptions and resource shortages," the report said. Some businesses "anticipate significant hikes in their selling prices in the months ahead."

Higher-than-expected inflation readings linked to supply chain disruptions is testing the Fed's view that a surge in prices is transitory, MNI has reported.