Wages Said To Be Rising Across Most Of US; Consumer Spending Only Up Slightly
The Federal Reserve has released its most recent beige book, which shows uneven growth across the US economy. According to Reuters, consumer spending increased only modestly in most districts. Although capital spending increased overall, there were only scattered reports of spending for capacity expansion. Additionally, manufacturing increased in most districts, but there were mixed expectations for future growth. Meanwhile, the Wall Street Journal states the beige book highlighted tightening labor markets and increasing wage pressures. The Journal reports that modest increases in retail prices in most districts are a sign that inflation pressures may be firming. The AP reports the Fed beige book indicates that in late February and March the US economy grew slightly, despite a weak energy sector as well as slower exports for some farm and factory products due to worldwide economic weakness and a stronger dollar. The survey showed modest increases in consumer spending and that wages are rising in every district but Atlanta. Residential housing construction expanded in most districts, “with several districts crediting a mild winter for boosting home sales.” USA Today reports that “consumer spending, which makes up 70% of economic activity, appeared to slow.” However, “there were two possible bright spots: Sluggish wage growth appears to be picking up and business spending ‘generally expanded across most districts.’”
What This Means For Small Businesses
Small businesses continue to feel uncertainty about the US economy when mixed results like the latest Fed beige book continue to show sluggish economic growth. Commenting on the results of the latest NFIB Small Business Economic Trends report, NFIB Chief Economist Bill Dunkelberg cautioned that the small business sector is currently “underperforming, doing little more than operating in maintenance mode.” Although there has been “slow economic growth,” he warned that “there is no exuberance, no optimism and not much hope, the numbers make it clear.”
Additional Reading
MarketWatch also reports on the Fed’s latest beige book.
Note: this article is intended to keep small business owners up on the latest news. It does not necessarily represent the policy stances of NFIB.
