Investing.com — The economic outlook soured on slowing growth in recent weeks as consumers are keeping a closer on spending amid an easing in the labor market as well as in the pace of inflation, according to the Federal Reserve’s Beige Book released Wednesday.
Economic activity slowed since the previous report, with retail sales declining, on average, as “consumers showed more price sensitivity,” the Fed said in its Beige Book economic report, based on anecdotal information collected by the Fed’s 12 reserve banks through Nov. 17. “The economic outlook for the next six to twelve months diminished over the reporting period,” it added.
The more sombre economic outlook comes as the demand for labor continued to ease, with wage growth remaining modest to “moderate in most Districts,” according the report, though there continued to be “difficulty attracting and retaining high performers and workers with specialized skills.”
The pace of inflation “largely moderated” across districts, though prices remained elevated, the report showed, with a notable rise in utilities and insurance costs across most districts. Most districts, however, expect moderate price increases to continue into next year, the report added.
The update comes just a day ahead of fresh inflation data expected to show an ongoing easing in price pressures that has boosted bets of rate cuts in the first half of next year.