Fed's Beige Book: Prices increased at an above-average pace

The Federal Reserve's Beige Book revealed on Wednesday that prices increased at an above-average pace, as seven districts reported strong price growth and the rest saw moderate gains, per Reuters.

Additional takeaways

"The outlook for demand improved further, but many contacts expressed uncertainty or pessimism over the easing of supply constraints."

"Three-quarters of districts reported either slight or modest job gains and the remainder reported moderate or strong increases in employment."

"Prices increased at an above-average pace, as seven districts reported strong price growth and the rest saw moderate gains."

"The outlook for demand improved further, but many contacts expressed uncertainty or pessimism over the easing of supply constraints."

"Healthy labor demand was broad-based but was seen as strongest for low-skilled positions."

"Wages increased at a moderate pace on average, and low-wage workers enjoyed above-average pay increases."

"Sectors reporting above-average growth included transportation, travel and tourism, manufacturing, and non-financial services."

"Energy markets improved slightly, and agriculture had mixed results."

"Labor shortages were often cited as a reason firms could not staff at desired levels."

"Supply-side disruptions became more widespread, including shortages of materials and labor, delivery delays, and low inventories of many consumer goods."

"Strained car inventories resulted in somewhat lower car sales despite steady demand, and home sales rose slightly despite limited supply."

"Firms in several districts expected the difficulty finding workers to extend into the early fall."

"Non-auto retail sales grew at a moderate pace on balance, and tourism was buoyed by the further abatement of pandemic-related concerns."

"Residential construction softened in several districts in response to rising costs, while commercial construction was mixed but up slightly on balance."

"Bank lending activity increased slightly or modestly in most districts."

"Pricing pressures were broad-based and grew more acute in the hospitality sector."

"Construction costs remained high but lumber prices reportedly eased a bit."

"While some contacts felt that pricing pressures were transitory, the majority expected further increases in input costs and selling prices in the coming months."

"Container prices returned to very high levels after having moderated in the spring."

Market reaction

This publication doesn't seem to be having a significant impact on the USD's market valuation. As of writing, the US Dollar Index was down 0.4% on a daily basis at 92.40.