Economic activity little change, labor market strength continues: Fed

Investing.com — Economic activity was little changed since early September as some consumers growing more sensitive to price pressures even as teh labor market continued to show strength, according to the Federal Reserve’s Beige Book released Wednesday.

“Economic activity was little changed in nearly all Districts since early September, though two Districts reported modest growth.,” the Fed said in its Beige Book economic report, based on anecdotal information collected by the Fed’s 12 reserve banks through October 11.

The unchanged outlook on the economy comes amid a string of stronger economic data released recently including the stronger September jobs report and retail sales.

The stronger data have dented market expectations for a fast and deep rate cut cycle, with some even mulling whether the Fed is likely to pause at one of the two remaining meetings this year.

Consumer spending was mixed, according to the report, with “some Districts noting shifts in the composition of purchases, mostly toward less expensive alternatives.”

The labor market, meanwhile, continue to show signs of strength. More than half of the districts reporting slight or modest growth, the report showed, while the remaining districts reporting little or no change. 

Many districts reported low worker turnover, and layoffs reportedly remained limited, underpinning an ongoing modest to moderate pace of wage increases. 

Inflation, meanwhile, continued to moderate, according to the report. In a sign that firms continue to struggle to pass on higher prices, the beige book noted that multiple districts “reported that input prices generally rose faster than selling prices, compressing firms’ profit margins.”