Economic activity has shown "slight improvement" during the Spring season compared with the previous period, while the growth of the economy and inflation was moderate, but there were marked signs of slowing growth in consumer spending, the survey showed the Federal Reserve System.
In the economic report of the US Central Bank, which is known as the "Beige Book" and based on an informal information collected by 12-D Reserve Banks Federal Reserve May 24, 2019 or earlier, it is noted that the economic activity as a whole has increased modestly during the period from April to mid-May, almost all states reported an increase, while only a few reported "moderate" growth of business activity.
According to the Fed's survey, consumer spending, which is the basis of the US economy as a whole were positive, but growth has been restrained. As for inflation, which has remained well below the Fed's target of 2%, the central bank survey showed that prices continued to rise at a moderate pace in most states compared to the previous index.
The modest rate of inflation observed in spite of the fact that wage growth continues to accelerate, "in most states says moderate job growth, while others - only a little," the study found.
The economy, such as manufacturing, sharper for escalating trade war between the US and China remained "relatively optimistic" with stable backlog, despite the uncertainty about the trade negotiations and the slowdown in global growth, the report said.
"Many have noted that in the summer months, business activity typically increases." Federal Reserve Chairman Jerome Powell said Tuesday that the central bank is ready to take "appropriate" steps to support economic growth, which gives hope that the decline in rates will occur in the near future.
Traders estimate the probability of a rate cut in July to 57%.
Highlights of the report:
- Beige Book indicates a "slight improvement" of economic growth compared with the previous period;
- The Beige Book is based on data obtained until 24 May;
- Data on the manufacturing sector as a whole, have been positive;
- Upward pressure on wages remained fairly subdued, given the low unemployment;
- Prices rose at a moderate pace in most regions;
- Construction of residential houses, the activity in the property market showed growth;
- Data on consumer spending, overall, been positive, but not too much;
- Demand for loans has been mixed, but the growth has been seen;
- Conditions in agriculture remained weak as a whole;
- Employment continued to grow in the country as a whole, as in the previous period.
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