A report of data prepared for the Federal Reserve’s policy-setting meeting which begins at the end of this month suggests the U.S. economy is on a steady path, with prospects for further improvement.
The Fed’s Beige Book shows that economic growth has been expanding at a modest pace across the Fed’s dozen districts. The survey comes amid gains in sentiment and expectations, reflected in the stock market rally and surge in bond market interest rates.
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Retail, energy and manufacturing
Since manufacturing has been an under-performer in the U.S. for quite some time, it is good to see the word “turnaround” in the Beige Book. Manufacturers in most districts are enjoying rising sales, and the energy sector may have turned a corner, according to the report.
While retail sales were a mixed picture from the vantage point of major chains, the report confirms what many consumers know to be true from their own buying habits, specifically that “growth in e-commerce has come at the expense of brick-and-mortar retailers.” Think Amazon.com versus the likes of Macy’s and Sears.
With the unemployment rate below 5 percent since April of last year, shortages of skilled workers are reported to be “widespread.” Even some “less-skilled” jobs are apparently lacking well-qualified candidates, the Fed says.
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Wages and prices
Despite the tightening job market, wage growth still appears to be slight, with moves by states to raise the minimum wage having some of the most significant impact. The report says “most Districts indicated that wages increased modestly.”
Generally, the outlook for this year (and probably next) suggests that the job market should continue to improve. The Beige Book tells us many workers …