WASHINGTON (9/3/15)--Two weeks out from the Federal Reserve’s much-anticipated September meeting, the Fed received data Wednesday indicating wage pressures are finally starting to build, a development that could signal an improvement in inflation.
In the Federal Reserve’s Beige Book, a snapshot of the state of the U.S. economy, all 12 districts tracked by the central bank reported expanding economic conditions.
Eleven of the 12 districts indicated either moderate or modest growth, while Cleveland reported only slight growth.
“In most cases, these recent results represented a continuation of the overall pace reported in the July Beige Book,” the Fed said. “Respondents in most sectors across districts expected growth to continue at its recent pace.”
Many analysts had predicted that, with the improving state of the job market, the Fed might raise interest rates for the first time since the financial crisis at its two-day meeting Sept. 16-17. Though recent economic fissures, including a turbulent stock market, have given experts pause.
Perhaps adding to the uncertainty, many districts in the report said that a strong dollar, a drop in oil prices and a weaker Chinese economy have hindered economic activity.
Still, most districts said labor demand continues to climb, and that tightening labor markets are pushing up wages in a number of industries.
“Across all districts, input and selling prices were reported to be stable or up only slightly,” the Fed said.
Whether the rosier wage picture provides the Fed enough ammunition to hike rates in two weeks remains to be seen.