US economic activity rises slightly between late May, early July: Fed
"Five districts reported slight or modest gains, five had flat activity, and the remaining two districts noted modest declines in activity," the Fed said.
US economic activity increased slightly between late May and early July, contributing to cautious sentiment among businesses, the Federal Reserve (Fed) said in its latest Beige Book. All 12 Fed districts cited price increases, with seven districts characterising them as 'moderate' and five as 'modest'. Businesses in all reported experiencing modest to pronounced input cost pressures related to tariffs.
All 12 Fed districts cited price increases, with seven districts characterising them as 'moderate' and five as 'modest'.
'In all twelve districts, businesses reported experiencing modest to pronounced input cost pressures related to tariffs, especially for raw materials used in manufacturing and construction,' the report said.
'Many firms passed on at least a portion of cost increases to consumers through price hikes or surcharges,' though some held off 'because of customers' growing price sensitivity,' leading to 'compressed profit margins'.
The report, published eight times a year, said the latest survey saw an improvement over the previous report in which half of districts reported at least slight declines.
Employment 'increased very slightly overall,' and many 'expected to postpone major hiring and layoff decisions until uncertainty diminished.'
"Contacts in a wide range of industries expected cost pressures to remain elevated in the coming months, increasing the likelihood that consumer prices will start to rise more rapidly by late summer," the report added.
Businesses are responding cautiously, with many delaying hiring and pricing decisions until there's more clarity.
Fibre2Fashion News Desk (DS)
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