Economic activity in the United States has improved since late May, with robust tourism and travel fueling growth, the Federal Reserve said Wednesday.
“Overall economic activity increased slightly since late May,” the Fed announced in its regular report on economic conditions known as the “beige book,” although warning that growth will likely still be slow in the coming months.
The latest assessment marked an improvement from its previous report, which found US economic activity was “little changed” in April and early May.
The US central bank has recently paused its campaign of interest rate hikes to give policymakers more time to assess the health of the world’s biggest economy — after 10 consecutive increases to its key lending rate.
While inflation has fallen sharply since last year, it remains above the Fed’s long-term target of two percent and the labor market is also historically strong.
Against this backdrop, the Fed has indicated that it expects two more interest rate hikes will be necessary before the end of the year.
On Wednesday, the Fed said economic activity either grew or held steady in most of its districts across the country, with the exception of Philadelphia and San Francisco, where activity fell.
“Tourism and travel activity was robust, and hospitality contacts expected a busy summer season,” according to the report, which found that reports on consumer spending were mixed.
Labor demand remained resilient, with most districts “experiencing some job growth,” the Fed added.
However, some regions reported that “hiring was getting more targeted and selective,” with some employers having an easier time finding the staff they needed.
There are signs that wage inflation is beginning to moderate, with contacts in many of the Fed’s districts reporting that pay growth was “returning to or nearing pre-pandemic levels.”
Prices increased at a modest pace overall, according to the beige book, and several Fed districts noted some slowing in the pace of increase.
Recent economic data suggests the United States is faring better than many expected, with fears of a recession receding following a recent upward revision to growth for the first quarter of the year.
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© Agence France-Presse
