2018.05.3021:21:00UTC+00Optimistic ‘Beige Book’ Report Keeps Fed on Track for June Rate Increase

The Federal Reserve said the U.S. economy expanded “moderately” from late April to early May in its most recent assessment.

Majority of the Fed's regional districts reported moderate economic growth during the period, the U.S. central bank said in its latest collection of anecdotal data regarding regional economic conditions known as the beige book. The only district that differed was the Dallas district, posting a solid surge in economic activity. The report was based on information gathered through May 21.

Some businesses voiced concerns regarding the Trump administration's ongoing trade disputes with China and other nations will affect international trade. For example, steel and aluminum prices rallied in some area, attributed to White House plans to impose tariffs on imports of those metals.

But a talent shortage is the biggest topic of concern for enterprises. Despite companies responding to chronic shortages of skilled workers by increasing pay and overall compensation, the Fed discovered that “wage increases remained modest” in majority of the country. The St. Louis area reported that some companies have begun easing drug-testing standards and limitations on hiring felons to resolve labor shortages.

The Beige Book confirmed the U.S. economy has gained momentum since the first quarter and it is on its path to surpass 3 percent growth in spring.

A steadily expanding economy, a contracting pool of labor and a gradual increase in prices all indicate that the Fed will lift its benchmark interest-rate during its policy meeting in June.