Modest to moderate is once again, as it has been all year, the Beige Book's assessment of economic growth. The report does cite some wage pressures but concerns over inflation are limited.
Short-term hurricane disruptions in the 3 southern districts -- Richmond, Dallas, Atlanta -- are described as significant though no lasting impact is expected. The report does warn, however, that hurricane recovery may worsen labor shortages in the regions.
The labor market in general is described as tight and job growth, as it was in the last Beige Book, is no better than "modest." And in a new warning, the report says labor shortages are restraining business growth in many regions.
But the shortages are not strengthening wages, at least in most districts where wage growth is also modest to moderate. Yet, in a refrain echoed most of the year, the report does note that wages are going in up some districts. But modest is the description for inflation in general. The report notes that input costs are up but that pass through to selling prices is limited.
Consumer spending gets a downgrade to slow growth despite strength in auto sales that included a hurricane replacement surge in Dallas' district. And housing sales continue to be hurt by low inventories of homes which, like the low supply of labor, is constraining growth.
The risk of dislocations tied, not to hurricanes, but to full employment is of special interest in today's report, especially the warning that lack of labor is holding the economy back. The month-end FOMC may not see a rate hike but debate at the meeting, centered on the tight labor market, is certain to be lively. Compiled by the Minneapolis Fed for the October 31 & November FOMC, the report's cut-off date was October 15.