Fed Notes Tight Labor Market and Moderate Wage Growth in Latest Beige Book
January 17, 2019
In the Federal Reserve’s latest Beige Book report, the central bank appears generally positive about the economy, but notes a few areas where optimism may be waning. All 12 of the Fed’s districts noted tight labor markets, with employers having a difficult time finding workers at all skill levels. This has resulted in moderate wage growth. The report did note concerns about increased volatility in the securities market, uncertainty regarding trade, and falling prices in the energy sector.
The Beige Book serves as an important insight into the thinking of fiscal policymakers. The moderate wage growth noted in the Beige Book suggests that inflation is unlikely to rise above the Fed’s 2 percent target. After increasing interest rates four times last year, Fed Chairman Jerome Powell has signaled that the central bank will be patient regarding future rate hikes.