US economy grew at a “modest to moderate” rate, according to the Fed’s Beige Book

The economy of USA grew at a “modest to moderate” rate in September and early October, when the latest increase in coronavirus cases peaked and began to recede, the agency said. Federal Reserve (Fed) in his latest report called the Beige Book.

“The outlook for short-term economic activity remained positive, but some districts noted greater uncertainty and cautious optimism than in previous months,” according to the Fed’s 12 regional district data summary, prepared as part of briefings prior to the November 2-3 meeting.

Employment increased, although the growth of the workforce was held back by a tight supply of workers, according to the report. Most districts reported “significantly high prices”. Some expected high prices to remain and others to moderate.

Fed officials are on track to begin cutting back on $ 120 billion in monthly purchases of bonds in November, following what most see as a substantial improvement in the labor market since late last year, despite unexpected growth. weak employment in August and September.

Inflation has been well above the Fed’s 2% target in recent months.

Central bank officials are very focused on the drivers of those price increases and on whether, as most expect, they will roll back next year. If not, various authorities have recently said, the Fed may need to start raising rates sooner than you think.

Wednesday’s report provided some clues in that regard, with most districts reporting price pressures due to supply chain bottlenecks as well as constraints on the labor side.

“Many firms raised sales prices, indicating a greater ability to pass cost increases on to customers amid strong demand,” Fed districts reported.