MNI BRIEF: US Firms See Slow, Steady Inflation -Fed Beige Book

Overall U.S. economic activity expanded "slightly" since late February, with 10 out of 12 Fed districts seeing either slight or modest growth, up from eight in the last report, and the Philadelphia and Chicago districts reporting no changes in activity, the Federal Reserve said Wednesday in its Beige Book report of interviews with local business and community contacts. Consumer spending was mixed and "barely increased overall," while employment rose slightly.

Price increases were modest and running about the same pace as the previous report and "contacts expected that inflation would hold steady at a slow pace moving forward," the Beige Book said. "Another frequent comment was that firms' ability to pass cost increases on to consumers had weakened considerably in recent months, resulting in smaller profit margins," the report said. "Multiple Districts said that annual wage growth rates had recently returned to their historical averages." (See: MNI INTERVIEW: Consumer Price Expectations Have Turned - UMich)