Modest to moderate is yet again the conclusion of the Beige Book which offers early assessments of Hurricane Harvey. The report says Harvey created wide disruptions in the Dallas and Atlanta regions and that 1/5 of oil and natural gas production in the Gulf is shut in. Petroleum supply is expected to remain tight and the report notes that freight prices have jumped.
But inflation overall is described as no better than modest as increases in input costs are only showing limited pass through to selling prices. Warnings of tight conditions in the labor market continue with worker shortages cited as well as higher wages in several of the 12 districts. Nevertheless job growth itself is described as slowing.
The key category of consumer spending, which slowed in the last report, gets a limited upgrade to rising. But the report highlights trouble for auto sales which are described as mixed with concerns cited that sales may be in for a long slowdown. On the plus side, housing is strengthening with home prices getting a lift from low inventories.
Yet even after the second quarter's solid 3 percent showing for GDP, the Beige Book remains mostly downbeat and is not pointing to any urgency for Federal Reserve policy makers to withdraw additional stimulus, at least anytime soon. Note that data in the report were collected on or before August 28 and that the assessments of Harvey's impact were made primarily before landfall.