On Wednesday 04 Sep, the Federal Reserve (Fed) reported that the US economy has grown at a moderate growth rate in recent weeks. The manufacturing has been hit by a global economic slowdown, and consumer purchases have given mixed reactions on household spending. The enduring US-China trade war has emerged to a large extent in the latest Beige Book of US central bank. The compilation of anecdotes companies across the country and conflicts reported in several areas are putting pressure on the business. The report was released before the Federal Reserve’s policy meeting from September 17-18, when it was widely expected that the central bank would cut interest rates in response to the economic slowdown, indicating that US companies will not soon expect a recession.
According to the report of the Fed, most companies remained optimistic regarding the near-term outlook even though the concerns about trade and tariff policy uncertainty persisted. The central bank said that the employment growth in recent weeks seems to be moderate, which is comparable to the previous reporting period. The Fed also said that the manufacturing activity was weaker to some extent than the previous period. The report detailed about the company’s concerns regarding tariffs, including uncertainty about the direction of trade policy which may inhibit investment prospects. In the Federal Reserve’s Boston district, including most of New England, persistent pricing was an issue for manufacturers as the tariffs remained a secondary.
The report said that the US trade conflict also exacerbated the problems faced by farmers. According to the report, the agricultural situation continued to be weak due to adverse weather conditions, trade-related uncertainties, and low commodity prices. The business contacts of the central bank reported continuous growth in consumer spending, which is the main driver for growth of the US economy. Despite the global economic slowdown, there has been substantial growth in recent months, but some parts of the country seemed to be less robust. The Beige Book, compiled by the Federal Reserve Bank of Atlanta, brings together reports from all 12 regional banks of the Federal Reserve as of August 23.