Fed's Beige Book: Overall price pressures increased further since the last report

The Federal Reserve's Beige Book revealed that overall price pressures in 12 Fed districts increased further since the last report, per Reuters.

Additional takeaways

"The national economy expanded at a moderate pace from early April to late May, a somewhat faster rate than the prior reporting period."

"Staffing levels increased at a relatively steady pace, with two-thirds of districts reporting modest employment growth over the reporting period and the remainder indicating employment gains were moderate."

"As the spread of COVID-19 continued to slow, employment growth was strongest in food services, hospitality and retail."

"Selling prices increased moderately, while input costs rose more briskly."

"Overall expectations changed little from April Beige Book, with contacts optimistic that economic growth will remain solid."

"Input costs have continued to increase across the board, with many contacts noting sharp increases in construction and manufacturing raw materials prices."

"Increases were also noted in freight, packaging, and petrochemicals prices."

"Contacts reported that continuing supply chain disruptions intensified cost pressures."

"Effects of vaccination rates most notable in consumer spending."

"Strengthening demand allowed some businesses, particularly manufacturers, builders, and transportation companies, to pass through much of the cost increases to their customers."

"Looking forward, contacts anticipate facing cost increases and charging higher prices in coming months."

"It remained difficult for many firms to hire new workers, especially low-wage hourly workers, truck drivers, and skilled tradespeople."

"Lack of job candidates prevented some firms from increasing output and, less commonly, led some businesses to reduce their hours of operation."

"Overall, wage growth was moderate, and a growing number of firms offered signing bonuses and increased starting wages to attract and retain workers."

"Contacts expected that labor demand will remain strong but supply constrained in the months ahead."

"Factory output increased further, despite significant supply chain challenges."

"Strong demand for homes outpaced homebuilders' capacity, leading some to limit sales."

"Demand for business services increased moderately; for transportation services was exceptionally strong."

Market reaction

This publication doesn't seem to be having an immediate impact on the USD's performance against its major rivals. As of writing, the US Dollar Index was virtually unchanged on the day at 89.92.