Energy Costs Keep Price Pressures Elevated Across Fed Districts
The central bank’s regional survey found limited economic growth, little employment change and wage increases in 11 of 12 districts.
Key takeaways
- Price pressures were strong or increasing in six of the 12 Fed districts.
- Businesses cited energy, commodity, tariff and insurance costs.
- Employment changed little, while wages rose in 11 districts.
- Market expectations favored no rate change in October and an increase in December.
Price pressures were strong or increasing in six of the 12 Federal Reserve districts, according to the central bank’s latest Beige Book. The report cited rising energy costs and data gathered through October 5.
Price increases were strong in three districts, moderate in eight and modest in one. The pace of price increases had risen from the previous period in four districts.
Businesses also pointed to costs for other commodities, tariffs and insurance. Companies reported that high diesel prices were feeding through supply chains as fuel surcharges increased.
Economic activity grew modestly overall. Two districts reported moderate growth, three modest growth and four slight growth, while three saw no notable change. Employment levels changed little in most districts, but wages rose at least somewhat in 11.
After September inflation data showed the highest monthly increase in five months, market expectations shifted toward a possible October rate increase, then eased. The prevailing expectation was that the Fed would hold rates at its October 27-28 meeting and raise them again in December.
This article was produced with the help of AI technology. Based on reporting by the outlets listed above.
