9/13/2018
By Charles Payne, CEO & Principal Analyst

For the most part, the economy continues to enjoy the moderate or modest expansion, but two issues are causes for concern. More businesses are complaining about labor shortage or labor skills gap and worries over a trade battle are mounting as well.

Highlights of Highlights by Federal Reserve District Boston

Firms reported the continued expansion of business activity. Retailers, manufacturers, and staffing firms cited year-over-year increases in revenues and sales. Labor markets remained tight amid little net hiring. Outlooks continued to be positive.

New York
The regional economy expanded at a moderate pace, and labor markets have remained tight. Input price increases have remained widespread, while firms' selling prices have decelerated somewhat.

Philadelphia
Economic activity continued to expand at a modest pace. With tight labor markets, wages grew moderately despite incremental job growth.

Cleveland
District economy grew at a moderate pace. Labor markets tightened, and wage pressures were noted broadly. Cost pressures among manufacturers and construction firms continued, especially for metals, construction materials, and transportation. Stronger confidence in the economy.

Richmond
The regional economy grew moderately in recent weeks. Port and transportation activity remained robust. Business travel and tourism were also strong throughout the Fifth District. Labor demand strengthened, and employers continued to report difficulties finding qualified workers.

Atlanta

Labor markets remained tight, and wage pressures increased for some firms. Retail sales improved further. Manufacturing activity continued to grow.

Chicago
Wages and prices rose modestly, and financial conditions improved slightly. Overall crop yields appeared set to forge a new record.

St. Louis
Manufacturers facing higher input prices reported passing those costs along to their customers. Agriculture contacts estimated that the majority of the soybean crop has not yet been priced, leaving farmers exposed to current market conditions.

Minneapolis

Employment grew strongly, despite continued labor constraints. Hiring demand was robust, and wage growth was moderate to strong. Manufacturing activity increased, but contacts in manufacturing and agriculture remained concerned about the negative impacts from trade restrictions.

Kansas City

Manufacturing contacts noted that recent trade developments had led to higher input prices and lower capital spending plans for some firms. Prolonged weaknesses in the agricultural sector increasingly impacted farm borrower finances.

Dallas
Manufacturing and service sectors sustained a healthy pace of growth, while activity in the housing and energy sectors was flat to down. Retail spending accelerated, as did loan demand. Wages and other input costs rose, but firms' ability to pass these increases on to customers was limited.

San Francisco

Conditions in the labor market tightened further, and price inflation increased moderately. Sales of retail goods picked up moderately, and activity in the consumer and business services sectors edged down slightly.

Chaheen Payne
Wall Street Strategies

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