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Fed Beige Book shows mounting tariff concerns among companies



WASHINGTON manufacturers in the US expressed concern about tariffs, and many reported higher prices and disruptions to the supply chain as part of the new trade policy, according to a Federal Reserve report released on Wednesday

Ten of the Federal Reserve 12 The districts reported modest or modest economic growth this summer, the Fed said in its most recent summary of anecdotal information on regional economic conditions known as the Beige Book. The report was based on information collected on or before 9 July and showed many companies expressing uncertainty about the impact of trade.

The Trump government imposed steel and aluminum tariffs on a number of countries in March, including China, Japan and Russia. Mr. Trump later imposed duties of 25% on steel and 1

0% on aluminum exports from European allies on 1 June. Trump tariffs have resulted in retaliatory tariffs on US exports in some countries.

Some manufacturers and contractors in the Fed report said tariffs have led to higher prices for products and chaos in the supply chain.

In the Fed district of Philadelphia, "a machine manufacturer noted that the steel tariffs for its supply chain were chaotic – to thwart planned orders, increase prices and trigger panic buying," the book said.

In the Fed district of Chicago, companies became increasingly concerned about the impact of trade disputes on the agricultural industry.

For a manufacturer of Maryland cans, customs means "he could not achieve the quality of the steel needed domestically and expected the loss of business to foreign competitors who are not faced with steel tariffs."

Nevertheless, the beige book showed the effect of tariffs must materialize only after a mood low for some companies. In the Boston Fed district, "the contacts expressed concerns about tariffs, but no quoted trade issues affecting demand, attitudes and investment plans," the report said.

In some cases, tariffs are speeding up the business for manufacturers. Companies in the Cleveland Fed dictated that worries about future price increases due to trade and inflation have led some customers to accelerate their purchases. "Producers in the district also expected sustained economic growth to stimulate consumer demand, at least in the short term.

In most districts, employment continued to rise at a modest to moderate pace, the report said, with most districts reporting firms According to the report, difficulties in finding skilled labor, which in some cases hampered growth,

Despite these tense labor markets, wage increases were, on balance, described as moderate to moderate.

The Ministry of Labor reported another recruitment, and the The average hourly wage for private sector employees rose 2.7% year-on-year in June, outperforming the 2% growth seen at the start of the upturn, but was still a modest gain by historical standards as the unemployment rate last month increased 4%. [196590MeanwhilepricesinalldistrictsincreasedonaveragefrommoderatetomoderateGovernmentreportshaverecentlyshownapick-upininflationreversingmuchof2017whenFedofficialsstruggledtoexplainsurprisinglyweakinflationratesTheprivateconsumptionpriceindextheFed'spreferredinflationmeasurerose23%versusMaybeatingthecentralbank's2%target

The general strength of the economy has supported the central bank's plan to gradually raise short-term interest rates, a message from the Fed chairman

Jerome Powell

affirms on Tuesday and Wednesday in Congress witness.

The Fed's "Fed" advisory committee "believes that – for the time being-the best way forward is to keep incremental boost" rates, Powell said Tuesday while testifying before the Senate Banking Committee.

Write to Sarah Chaney at sarah.chaney@wsj.com and Sharon Nunn at sharon.nunn@wsj.com


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