U.S. economic activity modest, job growth subdued: Fed survey
By Ann Saphir and Michael S. Derby
(Reuters) — U.S. economic growth was «modest» in recent weeks, job growth was «subdued,» and inflation slowed in most parts of the country, a Federal Reserve report published on Wednesday showed.
«Nearly all districts indicated businesses renewed their previously unfulfilled expectations that wage growth will slow broadly in the near term,» the U.S. central bank said in its latest «Beige Book» summary of surveys and interviews conducted across its 12 districts through Aug. 28. «Most Districts reported price growth slowed overall.»
The release comes two weeks ahead of the Fed's next rate-setting meeting, on Sept. 19-20, at which policymakers are widely expected to hold their target for short-term borrowing costs steady in the current 5.25%-5.5% range but to also leave open the door to a final quarter-point rate hike before the end of the year.
Financial markets are pricing about even odds that the Fed's rate-hike campaign, begun 18 months ago, is over.
Most Fed officials are not convinced, at least for now.
They do believe that their 5.25 percentage points of rate hikes since March 2022 are slowing the economy, capping job growth and most importantly cooling inflation, which soared to a 40-year high last year.
Evidence since they last raised rates, in late July, has tended to support that view, with monthly job growth averaging 150,000 jobs over the last three months, down sharply from the prior three months, and inflation by the Fed's preferred measure at around 3.3% in July, down from 7% last summer.
That's why even a hawkish policymaker like Fed Governor Christopher Waller has recently signaled his support for a pause on rate hikes to give time to carefully assess incoming data.
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