Economic Growth Sees a Slight Uptick
Since late May, the pace of economic growth has seen a minor rise, according to the Federal Reserve's recently released Beige Book. The report, based on anecdotal information from the Fed's 12 reserve banks through June 30, shows a general expectation for continued, albeit slow, growth in the coming months.
Inflation Slows as Economic Activity Gains Momentum
As the economy begins to rebound, several districts reported a deceleration in the rate of inflation. The report points out that inflation expectations are expected to remain "stable or lower" for the upcoming months, reflecting a marginally improved outlook on this front.
June Data Shows More Cooling in Inflation than Anticipated
The improved perspective on inflation was reinforced by data released Wednesday that showed a larger-than-expected cooling in inflation in June. The consumer price index rose 0.2% last month, following a 0.1% increase in May. Yearly inflation also slowed, moving at a 3.0% pace compared to 4% the previous year, marking the slowest rate of price pressure since March 2021.
Wage Increases Normalize, Returning to Pre-Pandemic Levels
The labor market also shows promising signs. Despite the steady demand for labor, multiple districts reported that wage increases are returning to or are nearly at the levels seen before the pandemic, signifying an easing in wage pressures.