Employment, wages and economic activity across the U.S. grew modestly from mid-May through early July, while price inflation stabilized, according to the Federal Reserve Bank Beige Book report released Wednesday.
The report, published eight times a year, provides anecdotal information on the Fed’s 12 districts.
Companies throughout most retail sectors had trouble finding workers, particularly in the construction, information technology and health care sectors. Compensation throughout the workforce grew slightly, with some entry-level positions receiving significantly higher wages.
Some concern was expressed throughout the country regarding immigrants’ abilities to obtain and renew work visas, which could threaten future growth.
Although inflation was down slightly, firms saw some increases in input costs, likely due to rising labor costs and tariffs. However, consumers haven’t seen the brunt of these costs in final prices due to high competition among firms.
Prices for steel, lumbar and professional and business services decreased slightly.
St. Louis district
Although highly impacted by recent flooding, economic conditions in the St. Louis district improved slightly, with increases in employment, wages and manufacturing activity.
The district includes eastern Missouri and all or parts of Arkansas, Illinois, Indiana, Kentucky, Mississippi and Tennessee.
Consumer spending, residential real estate activity and both financial and non-financial services also improved slightly.
Agricultural conditions deteriorated compared to the same time last year and declined modestly since the previous Beige Book report, published June 5. The percentage of highly rated soybeans, corn and cotton declined slightly, while the percentage of highly rated rice increased slightly. The percentage of all four of these crops declined relative to last year.
The price of grain increased sharply due to flooding. Soybean, sorghum, wheat and corn prices increased slightly. Meat prices will likely rise in the future due to higher feed prices, local contacts said.
Tariffs muddying access to the EU and China have caused an increase in input prices, but are not necessarily affecting prices seen by consumers, keeping with the national trend.
Kansas City district
Economic conditions expanded slightly in May and June in the Kansas City district, with contacts expecting quicker future growth.
The district comprises western Missouri and all or parts of Colorado, Kansas, Nebraska, New Mexico, Oklahoma and Wyoming.
Consumer spending rose, allowing higher retail and restaurant sales to compensate for lower sales in the car and tourism sectors. Contacts expect a future increase in car sales and decrease in restaurant sales.
Residential sales rose, particularly sales of low- and medium-priced homes, and banks saw a strong increase in demand for residential real estate loans. Overall loan demand increased moderately.
As in the St. Louis district, agricultural conditions remained weak, with flooding and other weather conditions leading to “unprecedented delays” in corn and soybean planting. In June, the percentage of wheat harvested in Oklahoma, Missouri and Kansas was less than half of what was planted last year. Lower quality of the plants harvested could lose some producers money.