U.S. economic activity was unchanged since early July, according to the Federal Reserve's BeigeBookreport released on Wednesday. That compares with the "modest pace" indicated in the central bank's previous snapshot of the U.S. economy in July.
Five districts of the 12 that comprise the Federal Reserve system reported "slight to modest growth" and five others reported "slight to modest softening."
Inflation is clearly taking a toll. "Most districts reported steady consumer spending as households continued to trade down and to shift spending away from discretionary goods and toward food and other essential items," the report said.
Perhaps more telling, the "outlook for future economic growth remained generally weak, with contacts noting expectations for further softening of demand over the next six to twelve months."
Here are some of the key points:
- Auto sales remained muted, due to limited inventories and elevated price.
- Hospitality and tourism contacts saw "solid leisure travel activity" and some "uptick in business and group travel."
- In real estate markets, home sales in all 12 districts fell and residential construction remained constrained by input shortages. Demand for office space softened.
- Labor markets remained tight for the six weeks from the previous report, but almost all districts saw some improvement in labor availability, especially in manufacturing, construction, and financial services.
- Prices remained elevated, but nine districts reported some degree of moderation in the rate of increase. Substantial increases were reported across all districts, particularly with food, rent, utilities, and hospitality. Lower fuel prices helped ease cost pressures and several districts saw some tapering in prices for steel, lumber, and copper. Most contacts expected price pressure to remain for the rest of the year.
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