People surveyed by the US Federal Reserve expect slow growth in the coming months.
(Photo: Reuters)
Washington According to the US Federal Reserve, the economy in the United States has picked up some speed. Economic activity has increased slightly since the end of May, according to the Fed’s economic report (Beige Book) published on Wednesday.
Five out of 12 central bank districts reported some growth, five others reported no change and two saw a slight decline, it said. In the coming months, the business people surveyed by the regional central banks generally expect slow growth in the world’s largest economy.
The report is likely to provide the currency watchdogs around central bank chief Jerome Powell with important clues for shaping their monetary policy. The next interest rate meeting will take place in two weeks on July 25th and 26th.
The demand for labor is described as remaining stable. Employers continue to have difficulties finding suitable workers.
Prices have recently risen moderately, as the report further shows. For the next few months, price expectations are generally stable or lower.
The survey on the economic situation is based on assessments that were collected up to the end of June.
Falling energy prices depress US inflation
The US Department of Labor released inflation figures for June earlier on Wednesday. Thereafter, falling energy prices pushed the inflation rate down to 3.0 percent from 4.0 percent in May – the lowest level in more than two years.
This raises hopes that the Fed’s preferred measure of inflation, the PCE index, which tracks consumer spending, has also fallen. However, new data will not be published until after the Fed meeting at the end of July. In May, this index was 3.8 percent.
The financial markets are currently assuming that the Fed will hike interest rates by a quarter of a percentage point at the July meeting after its interest rate pause in June. It is currently in a range of 5.0 to 5.25 percent.
According to the Fed minutes for the June meeting, the majority of monetary watchdogs at the meeting spoke in favor of an interest rate pause. According to the minutes, almost all members of the Open Market Committee, which decides on interest rates, expected further interest rate increases in the course of the year.
More: US inflation rate falls again significantly