**MNI POLICY:Fed Beige Book:Growth Moderate;Labor Mkts Tight>

--Five Things We Learned From the September 12 Beige Book

By Kevin Kastner and Harrison Clarke

     WASHINGTON (MNI) - The Federal Reserve's Beige Book noted that the 

economy expanded at a moderate pace for most districts, a small upgrade 

from the "moderate or modest" growth language in the last Beige Book, 

but with three districts reporting "below average growth." Language on 

labor markets (still tight) and prices (still modest to moderate) were 

little changed.

     Here are the key points from the Beige Book compiled by the Federal 

Reserve Bank of New York on through August 31, 2018: 

     - The economy expanded at "a moderate pace" nationally, a slight 

upgrade from the "moderate or modest" characterization seen in the last 

Beige Book. However, three districts -- Philadelphia, St. Louis, and 

Kansas City -- reported "somewhat below average growth." Dallas was 

again the upside outlier, reporting "relative brisk growth." 

     - Prices of final goods and services were up at a "modest to 

moderate pace" across most regions, but the Beige Book did note "there 

were some signs of deceleration." All districts noted widespread input 

price gains, especially for construction, with tariffs adding to rising 

input costs that some are trying to pass to consumers. A few noted 

rising inflation expectations. 

     - The labor market remained tight, with most districts seeing 

"widespread shortages" for both higher-skilled and lower-skilled 

workers. Employment grew "modestly or moderately" across most of the 

country, but half the districts said labor shortages were holding back 

sales or projects. Wage growth was "modest to moderate," but there was

strong wage gains for sectors like construction where labor shortages 

exist.

     - Manufacturing grew at a moderate rate, though Richmond saw an 

activity decline. While businesses overall remained optimistic, most 

cited concerns about trade tensions and some noted businesses had scaled 

back or postpone capital spending as a result of the trade uncertainty. 

     - Consumer spending grew modestly and home construction was mixed, 

but home sales were softer due to reduced demand in some cases and 

reduced supply in others. 

     ** MNI Washington Bureau: 202-371-2121 ** 

[TOPICS: MAUDS$,M$U$$$,MAUDR$,MT$$$$,MMUFE$]