Fed Beige Book Says US Economy Slowing, Prices Rising

Source : The Business Times, April 17, 2008

WASHINGTON - The Federal Reserve said on Wednesday that economic conditions were weakening across much of the nation while price pressures from food, fuel and raw materials were increasing.

In its anecdotal Beige Book summary of regional economic conditions, the Fed said manufacturers reported widespread increases in raw material prices and planned to raise selling prices to recover those costs.

'In particular, price increases were consistently reported for food products, fuel and energy products, and many raw materials,' the Fed said. 'More specifically, increases in the price of chemicals, metals, plastics and other petroleum based products were commonly cited,'

In a further sign that inflation pressures could be building, the Fed said despite generally weaker labour markets, there were some reports of wage pressures and continuing shortages of skilled workers.

There were few bright spots in the Fed's summary of economic activity between March 5 and April 7, when the current report by the New York Fed was compiled. It did say tourism was up in several districts, as foreigners took advantage of dollar weakness to save on US vacations.

Housing markets and home construction remained sluggish throughout most of the United States, but the Fed said there were 'few signs of any quickening in the pace of deterioration.' -- REUTERS