The Federal Reserve Beige Book says that consumer spending has been flat over the past week in New York.
In its Beige Book, a survey by the Federal Reserve revealed increased recession fears and the possibilities of rising inflation to last at least through the year. Released on the 13th of July, the report explains the economy’s current situation and associated fears. The Beige Book comprises the opinions and views of the central banks’ twelve Districts, including Boston and Philadelphia. Others are New York, Cleveland, Chicago, San Francisco, Atlanta, Minneapolis, Kansas City, Dallas, Richmond, and St. Louis.
According to the Federal Reserve Beige Book, the nation’s economy has been moving at a “modest” pace since its last report in mid-May. In addition, business contacts complain of a general drop in demand. Five of the twelve Districts show concern for a high risk of recession. The fed referred to the similarity between the latest and previous reports. The report says the Districts are disclosing mostly negative outlooks for future economic growth. Meanwhile, business contacts expect demand to grow weaker over the next 6 to twelve months.
The Federal Reserve Discusses Inflation Beige Book
Inflation in the US is at an alarming stage as it is running at its fastest annual rate since November 1981. The Federal Reserve said in its Beige Book that all Districts reported “substantial price increases.” Although some locations say there is moderation in lumber and steel, there are significant increases in food, commodities, and energy prices.
“While several Districts noted concerns about cooling future demand, on balance, pricing power was steady, and in some sectors, such as travel and hospitality, firms were successful in passing through sizable price increases to customers with little to no pushbacks. Most contacts expect pricing pressures to persist at least through the year.”
Furthermore, the Federal Reserve exposes the condition of labor markets in its Beige Book. Labor markets remain tight even as it eased due to low demand. Companies in about 4 Districts revealed that they are considering or had given bonuses to manage the situation. While some companies increased headcounts, some manufacturers noted no major hiring plans. On the other hand, a manufacturer is looking to cut its workforce as demand further weakens.
Also, the Federal Reserve Beige Book says that consumer spending has been flat over the past week in New York.
“Non-auto retailers reported that business has been steady to weaker in the last reporting period. Contacts have also become more pessimistic about the near-term outlook. Auto dealers in upstate New York reported that sales of both new and used vehicles have been sluggish in recent weeks, largely reflecting the ongoing lack of inventory, as well as affordability issues.”
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