Economic activity in the United States continued its “modest” growth in the past six weeks, but trade tensions remain a concern and manufacturing was mostly flat, according to a Federal Reserve report Wednesday.
Nine out of the 12 Fed regions saw slight growth from October through mid-November while three, including New York, stagnated, according to the Fed’s “beige book” survey of the economy.
Multiple regions mentioned the negative impact created by trade tensions and tariffs, and manufacturing in the majority of regions showed no growth.
The report was prepared in advance of the Fed’s policy meeting December 10-11, which is expected to see the central bank stand pat after cutting the benchmark interest rate three times this year as insurance against a slowing economy amid the global weakening and trade uncertainties.
The beige book tracks comments from businesses, farmers and bankers around the country, and has long reflected the unease about the impact of President Donald Trump’s trade conflict with China, which has yet to be resolved. A new round of tariffs are set to hit in mid December.
In Richmond, businesses continue to “face constraints from tariffs and trade uncertainties,” which has led to higher costs, while in New York, manufacturers and others “expressed ongoing concern about tariffs, trade tensions, and related uncertainty.”
In Atlanta, it said, “Contacts continued to mention trade policy as a potential downside risk to their outlook,” while energy companies in Dallas complained the tariffs and uncertainty were “squeezing margins” and “making planning difficult.”
But in the Chicago region, farmers expressed some optimism about positive signs that the conflict might be coming to an end.
Meanwhile, labor markets remained tight nationwide, with strong job gains in some areas, and some reporting the worker shortage continues to constrain growth, the survey showed.
But the picture in manufacturing was more mixed, with layoffs reported in the Cleveland region.