Fed Beige Book: Price increases may moderate throughout the year

The US Federal Reserve (Fed) reported that overall economic activity increased “slightly” in early 2023.

The Fed published the March edition of the ‘Beige Book’ report, which includes assessments of the current state of the US economy.

“General economic activity increased slightly in early 2023,” said the report, based on analysis of the bank’s 12 branches. the evaluation was done. In the report, which indicated that supply chain disruptions continue to decline, it was noted that consumer spending generally followed a flat course.

ECONOMIC CONDITIONS ARE NOT EXPECTED TO IMPROVE MUCH

While it is emphasized that high inflation and high interest rates continue to reduce the discretionary purchasing power of consumers in some regions, some concerns were raised about the increase in credit card debt, according to the report.

The report noted that travel and tourism activities remained fairly strong in most regions, while manufacturing activity stabilized after the contractionary period.

The report noted that demand for loans has fallen, credit standards have tightened and default rates have risen sharply.

In the Fed report, it was stated that economic conditions are not expected to improve much in the coming months amid heightened uncertainty.

THE LABOR MARKET MAINTAINS ITS POWER

The report, which stated that labor market conditions remained robust, noted that employment continued to increase at a moderate to moderate pace in most regions, although some companies stopped hiring and were laid off.

In the report, it was noted that wages are increasing at a moderate pace overall and that wage increases are expected to be more moderate next year.

PRICE INCREASES MAY BE MODERATE

In the report, which also referred to price increases, “inflationary pressures continued to be widespread, although price increases slowed in many regions.” expression was used.

The report noted that input costs such as energy and raw materials rose further in some regions, but there was some relaxation in transportation and freight costs.

Noting that house prices and rents remain high, the report noted that price increases are expected to continue to moderate throughout the year. (AA)