U.S. business activity continued to grow in June and early July, and overall price pressures eased or were flat in most places despite higher energy and building costs, the Federal Reserve said Wednesday.
Only the New York district reported a slowing in the rate of economic growth, the Fed’s “beige book” summary of economic conditions said.
Many districts reported substantial increases in the costs of energy, petroleum-based products, and building materials such as concrete and plywood, the Fed said. Despite those gains, price pressures either slackened slightly or were unchanged in most districts.
Labor markets generally continued to improve, although hiring in several districts was mixed, the Fed said. Wage pressures were moderate in nearly all districts.
At the same time, Dallas reported wage pressures in the accounting and energy professions, while Chicago noted pressures in some skilled professions.
Residential real estate activity remained robust overall but showed some signs of cooling in several districts, the Fed said. Housing activity in Massachusetts moved from hot to normal and eased in markets that had been especially hot, such as Washington, D.C., and Florida, the Fed said.
Most districts reported moderate-to-solid expansion in manufacturing activity.
Most regions experienced increases in retail sales, with vehicle sales in nearly all regions boosted by a fresh round of price discounts, the Fed said.
Commercial real estate activity improved in most districts, and Dallas reported that speculative office building had increased, the Fed said.
Loan demand increased or remained solid on increases in mortgage, home equity, and business borrowing in most districts, the Fed added.
Credit quality was generally strong, although there were concerns about loans to auto suppliers and farmers in the Chicago region, and loans for Florida condominium development.
The Fed issued its beige book summary of comments on the economy as officials prepared to meet Aug. 9. The Fed is widely expected raise its benchmark target for short-term interest rates for the tenth straight time by a quarter-point to 3.5 percent.
The beige book was prepared by the Kansas City Fed with data collected on or before July 18.