The governors of the Federal Reserve (Fed, US Central Bank) still consider the prospects for economic growth in the United States to be “weak” and predict “a further decrease in demand over the next six to twelve months”.
This was declared by the US central bank in its “beige book”, a document that contains recent information about the country’s economy, published this Wednesday and which highlights that the drop in demand will occur while the pressure on prices will persist at least until the end of the year.
Since the beginning of July, according to the report, economic activity has remained largely unchanged, with five of the 12 districts where the Fed splits the US reporting mild or moderate growth in activity and another five reporting mild or moderate weakening.
Most districts reported steady consumer spending, although it was mostly targeted for food and other essential products.
With inflation reaching 8.5% in July, prices remained very high, but nine districts reported some moderation in their rate of increase. Food, rent, public services and hotels and restaurants rose the most in all districts.
Regarding employment, job creation increased at a moderate pace in most of the districts. districts, although overall labor market conditions “remained difficult”. Wages grew in all districts, but at a slower pace than expected.
In 26 August, at the symposium of economic leaders in Jackson Hole, in the state of Wyoming, Fed Chair Jerome Powell acknowledged that restoring price stability “will likely require” maintaining a “restrictive” monetary stance for some time.
With the goal of containing inflation, in July the interest rate was increased by 0.75 point, the fourth consecutive increase and the second consecutive increase by the same amount. Powell admitted, however, that “at some point” it will be advisable to “moderate the pace of interest rate hikes”.