“Expectations for the future of the economy were for slower growth over the next six months due to uncertainty around the upcoming election, domestic policy, geopolitical conflict, and inflation,” the Fed said in its Beige Book economic report, based on anecdotal information collected by the Fed’s 12 reserve banks through Jul. 8.
The weaker outlook comes as the bulk of districts this reporting slight to a modest pace of growth, but five five noted “flat or declining activity—three more than in the prior reporting period,” the report added.
In a sign of further cooling in the labor market, several districts saw some improvement in labor supply conditions as labor turnover declined, the report showed, reducing demand to find new workers.
“Looking ahead, contacts in several Districts expect to be more selective on who they hire and not backfill all open positions,” the report added.
The labor market has come into increased focus in recent weeks after Federal Reserve chairman Jerome Powell signal a slightly shift in the the central bank’s focus to easing in the labor market rather than solely on inflation.
The pace of inflation, meanwhile, was modest, with “most Districts noted that input costs were beginning to stabilize,” the Beige Book showed.
Source: Economy - investing.com
