US economy grows at moderate pace in June, with tighter
labor market and muted inflation pressure, according to the latest
survey results released by the Federal Reserve on Wednesday.
"Economic
activity expanded across all 12 Federal Reserve Districts in June, with
the pace of growth ranging from slight to moderate," said the Fed in
its latest Beige Book which gauges its 12 districts' economy.
The majority of the districts expected the economy to grow at a modest to moderate pace in the months ahead, said the report.
US central bank will continue to raise interest rates
gradually and shrink its balance sheet this year, while monitoring
inflation closely,Janet Yellen, U.S. Federal Reserve Chair said
Wednesday.
"The (Federal Open Market) Committee
continues to expect that the evolution of the economy will warrant
gradual increases in the federal funds rate over time to achieve and
maintain maximum employment and stable prices," Yellen said in her
prepared testimony before the U.S. House Financial Services Committee.
Inflation
in the US has softened in recent months, which triggers discussions
about the pace and timing of the future rate hikes among Fed officials.
Consumer spending, which accounts for nearly 70 percent
of the US economy, appeared to be rising across a majority of districts,
led by increases in non-auto retail sales and tourism, said the report.
According
to the report, employment in most districts maintained a modest to
moderate pace of expansion, while Atlanta and St. Louis districts noted
flat employment levels.
The report showed that labor markets tightened even more for both low and high skilled positions.
Board
of Governors of the Federal Reserve System member Lael Brainard said on
Tuesday that she would want to assess the inflation process closely
before making a determination on further interest rate hikes.
However, the tight labor market did not push too much
upward pressures on wages, which continued to grow at a moderate to
moderate pace in most districts.
Prices continued to
rise modestly in the majority of districts and a few districts noted
that price pressures had eased slightly according to the report.
Fed
chair Janet Yellen said on Wednesday that the central bank will
continue to raise interest rates gradually and start to shrink its
balance sheet this year, while monitoring inflation closely.