By Yasin Ebrahim
Investing.com – The U.S. economic recovery remains on track supported by stronger consumer spending amid a pick up in the labor market and inflation that is expected to pick up pace as the economy reopens, according to the Fed’s Beige Book released Wednesday.
The central bank’s Beige Book economic report, based on anecdotal information collected by the Fed’s 12 reserve banks through April 5, showed the U.S. economy continued to recovery at a modest pace amid easing pandemic restrictions.
“National economic activity accelerated to a moderate pace from late February to early April. Consumer spending strengthened,” the Biege book said.
Inflation, meanwhile, appears to be on the move, driven by input costs that will likely continued to push up prices in the near term.
“Prices accelerated slightly since the last report, with many Districts reporting moderate price increases and some saying prices rose more robustly,” according to the report. “Cost increases were partly attributed to ongoing supply chain disruptions, temporarily exacerbated in some cases by winter weather events.”
Federal Reserve Chairman Jay Powell continued to downplay the prospect of sustained inflation pressures and continued to suggest there was a still a ways to go until the economy is back at pre-pandemic levels.
“We’ve said we expect to keep rates where they are until meet three-part test,” Powell said Wednesday at a virtual event organized by the Economic Club of Washington. The three part test includes maximum employment, inflation reaching 2%, and on track to run moderately above 2% for some time.
Still, the release of the Beige Book weighed on sentiment amid signs businesses continue to see a pickup in inflation. The eased further below record highs, down 0.2%.
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