Economic growth is slowing in several regions of the U.S. but energy-fuelled inflation is on the rise, the Federal Reserve said in its latest "Beige Book" report June 14.
"Manufacturing activity still expanded quite strongly, but reports indicate more areas of weakness than in March and early April," it said. The report added: "High energy costs were fueling price increases in manufacturing and, to a much lesser extent, retail."
"Reports from all 12 Federal Reserve Districts indicate that economic activity continued to expand from mid-April to early June, but there were some signs of deceleration," the report said.
Labor markets continued to tighten, with more of the Fed Districts reporting employers having problems finding skilled workers. Still, wage pressures "remained moderate overall" except among workers with sought-after skills.
The latest U.S. inflation indicators have shown price pressures building on the back of sky-high energy prices. "Reports of costs being passed forward varied considerably but were more prevalent than in the last Beige Book (in April)."
Copyright Agence France-Presse, 2006