Fed's Beige Book Says U.S. Economic Activity Little Changed

The Federal Reserve released its Beige Book report Wednesday afternoon, noting U.S. economic activity was little changed in recent weeks.

The Beige Book, a compilation of anecdotal evidence on economic conditions in each of the twelve Fed districts, said nine districts reported either no change or only a slight change in activity while three indicated modest growth.

Expectations for future growth were mostly unchanged as well, although two districts saw outlooks deteriorate, the Fed said.

The report also said job growth moderated somewhat this period as several districts reported a slower pace of growth than in recent Beige Book reports.

A small number of firms reported mass layoffs, and those were centered at a subset of the largest companies, the Fed added.

On the inflation front, the Beige Book said overall price levels rose moderately during this reporting period, though the rate of price increases appeared to be slowing.

“Contacts noted modest-to-sharp declines in the prices of nonlabor inputs and significantly lower freight costs in recent weeks,” the Fed said. “Nevertheless, producer prices for finished goods rose modestly this period, albeit at a slightly slower pace.”

The report also said contacts expected further relief from input cost pressures but anticipated changing their prices more frequently compared to previous years.

The Beige Book is typically released two weeks ahead of the Fed’s next monetary policy meeting, with the next meeting scheduled for May 2-3.

CME Group’s FedWatch Tool currently indicates an 85.4 percent chance of a 25 basis point interest rate increase and a 14.6 percent chance rates will be left unchanged.

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