The U.S. economy expanded across most of the country in the past six weeks as the job market showed strength that’s failing to stoke broad wage pressures, a Federal Reserve survey showed.
The central bank’s Beige Book economic survey, which is based on reports from late November to early January by regional Fed banks, showed that two of the 12 Fed districts posted “moderate” growth and seven described the expansion as “modest.” Boston contacts were described as “upbeat,” while the New York and Kansas City Fed districts reported “essentially flat” economic activity.
The report released Wednesday in Washington underscores the challenge facing Fed policy makers heading into their meeting later this month: The labour market is strengthening without triggering signs of higher wages or inflation more broadly.
Few market participants and economists expect an interest-rate change at the Jan. 26-27 meeting, but the anecdotes could help to colour policy makers’ reading of the economy as they move toward a potential increase in March.
“Labour markets continued to improve, with employment increases evident in reports from seven Districts,” according to the Beige Book. “Districts reported little overall change in wage and price pressures, with wage increases running from flat to moderate, while price increases tended to be minimal.”