The Federal Reserve is back in the spotlight as high inflation continues to poke holes in Americans’ pockets.
What happened
On Wednesday, the Fed released its beige book for September, sharing an official analysis of the country’s economic conditions and prospects.
Several key Fed figures accompanied the book’s release on Wednesday with speeches in which they expressed a steady pace of policy aimed at bringing inflation back to stable levels, with a strong commitment to monetary policy, one in particular further increase to the (already above-average) federal currency funds rate.
Highlights from September’s Beige Book
The Fed’s sixth Beige Book of the year reports that economic conditions across the country remain relatively resilient, despite an 8.5% annual inflation rate registered in July, well above the ideal 2% target.
The economy has remained unchanged on balance since the Fed’s last Beige Book in July.
Of the 12 federal districts, five reported mild to moderate growth, while five reported mild to moderate deceleration.
“However, prospects for future economic growth remained generally weak,” the book says, and demand is expected to continue falling over the next six to 12 months.
Beige Book Key Points
- Consumer spending remained stable, but household consumption shifted away from non-durable goods towards groceries and more essential goods.
- Production grew in several districts, but production continued to be hampered in many cases due to supply chain disruptions and labor shortages.
- The tourism sector saw overall solid leisure travel activity with an increase in business and group travel.
- Home sales fell across the country and housing construction continued to be constrained by production shortages. A decline in demand for office space led to a slowdown in commercial real estate activity.
- Employment increased at a modest to moderate pace and employers reported improved employee retention with rising wages in all counties.
- Prices stayed high…
