Fed Beige Book Shows 3.8% Inflation Squeezing Consumers as Energy Costs Weigh
Updated
Updated · Reuters · Jun 3
Fed Beige Book Shows 3.8% Inflation Squeezing Consumers as Energy Costs Weigh
3 articles · Updated · Reuters · Jun 3
Summary
Weakening consumer spending and persistent price pressure dominated the Fed’s latest Beige Book, giving Kevin Warsh a tougher backdrop ahead of his first policy meeting in two weeks as chair.
Energy costs tied to the Middle East conflict were cited as the main inflation driver, with spillovers into shipping, packaging, groceries and fertilizer; New York contacts even warned of limited apple supplies.
3.8% April inflation, up from 3.5% in March, has pushed Fed thinking away from expected rate cuts toward a longer hold at 3.50%-3.75% or even a possible hike.
Labor conditions looked steadier overall, with economists expecting 4.3% unemployment in May, but several districts reported AI-related hiring slowdowns and a surplus of entry-level workers.
The survey underscores a widening split in the economy: investment remains strong, but middle-income households are stretching each dollar as higher gasoline and other costs erode demand.