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BUSINESS
Federal Reserve System

Beige Book: Modest economic growth, no inflation

John Waggoner
USA TODAY
A new home is under construction in May in Riverview, Fla.

The Federal Reserve's Beige Book, a summary of economic activity in all 12 Fed districts, shows a moderate to modestly growing economy with little sign of inflation.

The Beige Book, so called because of the color of its cover, is a largely anecdotal survey of economic conditions in each Fed district. The survey covers a broad range of economic activity, from manufacturing to construction to financial services.

The brightest note: Commercial construction, which grew in most districts. In some areas, such as Chicago and Dallas, projects were delayed because of a shortage of skilled construction workers. And the New York Fed noted an increase in demand for commercial construction loans.

Another bright spot was transportation.The Fed said that demand for trucking, rail and other transportation was generally growing, and that insufficient capacity was a problem in some districts, such as Minneapolis, Cleveland and Kansas City.

Tourism also looked good in most districts, with upbeat reports from districts in Boston, New York, Atlanta, Minneapolis and Richmond, Va. Advance bookings for travel and lodging were strong in Philadelphia, Richmond and Minneapolis.

Demand for manufacturing workers led to shortages in Boston, where machinists were in short supply. Richmond, Kansas City, Mo., and Minneapolis were seeing shortages of truck drivers. Outside of those areas, pressure to raise wages was small, most districts reported.

Inflation was elusive. Districts reported few or modest price increases. But in Chicago, a number of manufacturers expected to be able to raise prices, especially in the auto industry.

And most districts said that consumer spending was light to moderate, which was reflected in Wednesday's disappointing retail sales numbers. Nevertheless, Boston, Philadelphia, Chicago, Kansas City, Dallas and San Francisco indicated that retail contacts were relatively optimistic about the remainder of the year.

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