{LONGTERMINVESTORS} U.S. Economy Grows Modestly as Job Market Tightens, Fed Says

 


By Christopher Condon
    (Bloomberg) -- The U.S. economy expanded at a modest pace
across most of the country since mid-April, causing the labor
market to tighten as employers continued adding jobs and nudging
wages higher, a Federal Reserve report showed.
    "Employment grew modestly since the last report, but tight
labor markets were widely noted," according to the Fed's latest
Beige Book, an economic survey published eight times a year.
"Wages grew modestly, and price pressures grew slightly in most
districts."
    Fed officials have made clear they expect to raise interest
rates in the coming months, possibly as early as this month, if
the U.S. economy continues to improve. The policy-making Federal
Open Market Committee meets in Washington June 14-15. After
raising rates in December, the committee has balked at a second
increase because of worries over global growth and financial
market turbulence.
    Prices in federal funds futures contracts imply that
investors see a 24 percent chance of a rate increase this month,
with odds rising to 53 percent by the FOMC's July session.
    Wednesday's Beige Book may do little to change officials'
outlook for the economy. It characterized the economy as slowly
gaining ground, using versions of the word "modest" or
"moderate" 23 times in the report's six-page summary.
    The terms were used to describe gains in overall growth,
consumer spending, employment, loan demand and financial
services. Manufacturing results were reported as mixed, while
the energy industry, still ailing form the decline in the price
of oil, remained weak.
    Among the Fed's 12 districts, Chicago and Kansas City
reported slowing growth, while Dallas said the economy grew
"marginally." New York characterized activity as "generally
flat." Other districts reported modest or moderate growth.
    Several districts reported rising demand for labor,
particularly for high-skilled workers. Atlanta and Richmond
noted that low-skilled positions were also becoming harder to
fill. "Wages grew modestly since the last report, with increases
concentrated in areas of labor tightness," the report stated.
    The report, prepared by the Minneapolis Fed, was based on
information collected before May 23. It summarizes comments
received from businesses and other contacts outside the Fed
system.
    Economic data have shown steady if unspectacular
improvement in the U.S. following a disappointing first quarter.
The Commerce Department reported Tuesday that consumer spending
in April rose by the most in almost seven years.
    (Updates with chart after sixth paragraph.) 

--
You received this message because you are subscribed to the Google Groups "LONGTERMINVESTORSRESEARCH" group.
To unsubscribe from this group and stop receiving emails from it, send an email to longterminvestorsresearch+unsubscribe@googlegroups.com.
Visit this group at https://groups.google.com/group/longterminvestorsresearch.
For more options, visit https://groups.google.com/d/optout.