Investing.com – Economic growth continued to expand at a modest pace in recent months across the U.S. central bank’s regional districts amid moderate wage growth, a Federal Reserve survey showed.
The central bank’s Beige Book economic report, based on anecdotal information collected by the Fed’s 12 reserve banks through the end of the year, showed pricing pressures grew at a moderate pace despite ongoing tighter labor market conditions. This has confounded the Fed's expectations that tighter labor market conditions would spur a rebound inflation.
“The economy continued to expand from late November through the end of the year, with 11 Districts reporting modest to moderate gains ” according to the report, released Wednesday in Washington. “The outlook for 2018 remains optimistic for a majority of contacts across the country"
Despite the lack of pricing pressures reported across the Fed's regional districts, the most recent reading of the consumer price index showed US consumer prices posted their biggest gain in eleven-months raising 1.8% in the 12 months through December.
The uptick inflation is expected to support the Federal Reserve's case to raise rates at least three times this year amid a transitional period at the central bank as Jerome Powell prepares to replace Fed chair Janet Yellen in the coming months.