WASHINGTON – The economy and hiring continued to expand modestly across most of the United States from mid-May until the end of June, leaving some firms unable to find skilled workers, the Federal Reserve said Wednesday.
In its latest survey of business conditions, the Fed found modest growth in 11 of 12 regions. Cleveland reported “little change” in growth. In its previous survey, the Fed reported modest growth in half the regions. The energy sector, hard hit by low oil prices, remains weak.
The report, known as the Beige Book, will be discussed at the Fed’s upcoming meeting on July 26-27 as policymakers weigh whether and when to raise short-term U.S. interest rates — something they’ve been reluctant to do since hiking rates in December for the first time since 2006. The Fed was wary about the financial turmoil and potential economic damage caused by Britain’s surprise June 23 decision to leave the European Union.
Some regions reported a shortage of skilled workers, especially in information technology, biotechnology and health care. Cleveland, Chicago and San Francisco reported that wages were rising for entry-level employees.
Still, overall wages weren’t growing much. Neither was inflation, which has stayed below the Fed’s 2 per cent annual target. Consumer spending was “positive” but appeared to be weakening.
The U.S. economy got off to a slow start in 2016, expanding at a laggardly 1.1 per cent pace from January through March. Economists expect growth to pick up in the spring and summer.
The Labor Department reported last week that American employers added a healthy 287,000 jobs in June, a relief after May brought just 11,000 new jobs.