**MNI POLICY: Fed Beige Book: Tariffs Still Pressuring Prices>

By Jean Yung

     WASHINGTON (MNI) - The Federal Reserve's latest Beige Book 

published Wednesday noted that rising materials and shipping costs due 

in part to tariffs as well as difficulty finding qualified workers 

remain among the top concerns for businesses across the country. The 

report, an anecdotal review of the state of the economy over the past 

six weeks, showed a modest to moderate expansion across most Fed 

districts. The exceptions were: The Dallas district reported robust 

growth driven by manufacturing activity, while New York and St. Louis 

saw slight growth. 

     Here are some key points from the Beige Book, compiled by the 

Federal Reserve Bank of Richmond with data through Oct. 15, 2018: 

     - The economy overall appeared to slow a tad from the "moderate" 

pace reported in the last Beige Book. Manufacturers saw moderate growth 

but said they continued to face rising input and shipping costs and a 

shortage of qualified workers. Consumer spending increased modestly 

while commercial and residential real estate was mixed with some 

reports of rising home prices and low inventory. 

     - Prices of final goods and services grew at a "modest to moderate 

pace" across most regions as manufacturers raised prices to keep pace 

with higher input prices, which they blamed on tariffs. Energy firms 

said they reorganized supply chains as a result of the tariffs. Some 

retailers and wholesalers raised prices as transportation costs rose and 

also "worried about impending cost increases resulting from tariffs." A 

number of firms cited concerns over trade tensions and some are delaying 

capital spending while waiting out the uncertainty. 

     - 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, with some firms reporting the labor shortage constraining 

growth. 

     - Wage growth continued to be "modest to moderate" with an 

unchanged outlook though there were gains for sectors like construction 

where labor shortages exist. Some businesses offered bonuses, more 

vacation or flexible work schedules in lieu of higher wages to attract 

and retain workers. 

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

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