U.S. economic growth remains on a steady track, with increasing pressure on inflation from a tight labor market and rising energy costs, the Federal Reserve said in its Beige Book report April 26.
"Reports from all 12 Federal Reserve Districts indicate that economic activity continued to expand in March and the first half of April," the central bank said in its economic outlook to be considered at its May 10 policymakers' meeting. Three of the regional banks described growth as "solid," while others called the rate of economic activity as "modest," "moderate" or "steady."
The Beige Book indicated some softening in what had been a sizzling U.S. housing market. It noted inflation pressures could be building as a result of the high cost of oil and other commodities, as well as tighter labor markets. "The pace of housing market activity is said to be moderating in many districts, while commercial activity is firming," the report said.
"A majority of districts note that labor markets, at least for skilled workers, are tight or are tightening. While energy costs are high and costs for selected other inputs are rising, businesses continue to have limited ability to raise their selling prices."
Copyright Agence France-Presse, 2006
