US Beige Book Shows Economy Expanded in Past 6 Weeks

The U.S. economy expanded across most of the country in the past six weeks as the job market showed strength that’s failing to stoke broad wage pressures, a Federal Reserve survey showed.

The central bank’s Beige Book economic survey, which is based on reports from late November to early January by regional Fed banks, showed that two of the 12 Fed districts posted “moderate” growth and seven described the expansion as “modest.” Boston contacts were described as “upbeat,” while the New York and Kansas City Fed districts reported “essentially flat” economic activity.

The report released Wednesday in Washington underscores the challenge facing Fed policy makers heading into their meeting later this month: The labor market is strengthening without triggering signs of higher wages or inflation more broadly.

Few market participants and economists expect an interest-rate change at the Jan. 26-27 meeting, but the anecdotes could help to color policy makers’ reading of the economy as they move toward a potential increase in March.

“Labor markets continued to improve, with employment increases evident in reports from seven Districts,” according to the Beige Book. “Districts reported little overall change in wage and price pressures, with wage increases running from flat to moderate, while price increases tended to be minimal.”

via Bloomberg

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, he established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza