US Economic Outlook Shows Modest Growth in July
(MENAFN) The economic uncertainty in the United States remained relatively high throughout July, leading to a more cautious outlook among businesses, according to the Federal Reserve’s Beige Book report released on Wednesday.
"Economic activity increased slightly from late May through early July. Five Districts reported slight or modest gains, five had flat activity, and the remaining two Districts noted modest declines in activity," the Fed noted.
The Beige Book, which compiles data from the Federal Reserve's 12 regional banks, indicated that businesses continued to face "modest" to "pronounced" pressures on input costs, which were largely driven by tariffs on raw materials essential for manufacturing and construction sectors.
To cope with these rising expenses, many businesses passed on part of the increased costs to consumers through price hikes or added surcharges.
However, some companies refrained from raising prices due to growing customer sensitivity, which ultimately led to tighter profit margins, the report explained.
"Contacts in a wide range of industries expected cost pressures to remain elevated in the coming months, increasing the likelihood that consumer prices will start to rise more rapidly by late summer," the report cautioned.
When it came to employment, the growth was modest, with only a slight overall increase in hiring.
One district reported modest gains, six saw slight growth, three districts experienced no change, and two noted mild declines in job numbers.
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