Most of US saw 'slight or modest' growth from mid-Apr to May 22: Fed

The report noted some weakness in retail as rising prices bit into sales.

While two districts said “rapid inflation was the continuation of a trend”, three said prices had ‘moderated somewhat’, the central bank’s periodic ‘Beige Book’ said.

About half the districts reported companies are still able to pass higher prices on to consumers, though some noted “customer pushback, such as smaller volume purchases or substitution of less expensive brands.”

“Surveys in two districts pegged year-ahead increases of their selling prices as ranging from 4 to 5 per cent; moreover, one district noted that its firms’ price expectations have edged down for two consecutive quarters,” the report stated.

“Contacts tended to cite labor market difficulties as their greatest challenge, followed by supply chain disruptions,” the report said. “Rising interest rates, general inflation, the Russian invasion of Ukraine, and disruptions from COVID-19 cases (especially in the northeast) round out the key concerns impacting household and business plans.”

First-quarter GDP contracted at a 1.5 per cent annualised pace.

The Beige Book noted employment was up ‘modestly or moderately’ across all districts despite some reports of a slowing or freeze in hiring.

“However, worker shortages continued to force many firms to operate below capacity. In response, firms continued to deploy automation, offer greater job flexibility, and raise wages,” the report said.

ALCHEMPro News Desk (DS)