What ultimately matters is what Yellen and her colleagues decide to do with their benchmark interest rate in December – not what Trump says or what an individual Beige Book report shows.
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Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., August 31, 2016.
“Overall consumer spending was little changed in most districts”, the report said. Credit quality remained favorable in most districts; however some oil and gas companies reported challenges obtaining credit.
Contacts across the twelve Districts generally expect moderate economic growth in coming months.
Fed Chair Janet Yellen said recently that the case for another interest rate hike has strengthened as the USA economy and labor market continue to improve. U.S. job creation in August slowed considerably to a weaker-than-expected 151,000 positions added.
There were statements from three state Fed presidents to mull over on the day, starting with San Francisco Federal Reserve President John Williams overnight comments that it “makes sense” to raise interest rates at a gradual pace, “preferably sooner rather than later”. In Boston, contacts reported an unusually high number of job openings, and in the Richmond District turnover rates increased for entry-level positions.
The Nasdaq closed at a record level on Tuesday, while the S&P 500 and the Dow edged up after weak services data dimmed the prospects of a rate hike when the Fed meets later this month.
The Beige Book was compiled by the San Francisco Fed with information collected on or before August 29, 2016. Firms also have to invest in machinery and equipment to boost workers’ productivity for the economy to see more sustainable growth. Commercial real estate activity expanded further.
“In general, expectations of wage growth for the coming months were modest” and price increases “remained slight overall”, according to the Fed’s latest Beige Book release, a survey of business contacts published Wednesday in Washington.
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In a hopeful sign for Texas and the Dakotas, the Beige Book found some signs of stabilization in demand for energy products and services.
