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Fed's Beige Book Indicates Positive Outlook Despite Trade-Related Uncertainty

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A report from the Federal Reserve on Wednesday said economic activity continued to expand at a modest pace overall from mid-May through early July.

The Beige Book, a compilation of anecdotal evidence on economic conditions in the twelve Fed districts, noted the assessment of the economy was little changed from the prior reporting period.

The Fed referenced widespread concerns about the possible negative impact of trade-related uncertainty but said the economic outlook was generally positive for the coming months, with expectations of continued modest growth.

The report said job growth was slightly slower than the previous reporting period but continued at a modest pace on balance.

Labor markets continued to be described as tight, with some districts noting worker shortages across most sectors, especially in construction, information technology, and health care.

However, the Fed said some manufacturing and information technology firms in the Northeast reduced their number of workers.

A few reports highlighted concerns about securing and renewing work visas, flagging this as a source of uncertainty for continued employment growth, the Fed said.

With regard to inflation, the districts indicated the rate of price inflation was stable to down slightly from the prior reporting period.

While higher tariffs and rising labor costs led to some increases in input costs, firms' ability to pass on cost increases to final prices was restrained by brisk competition.

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