Fed Finds Economy Strong, Prices Tame
The U.S. economy is still growing strongly with labor shortages reported nationwide, the Federal Reserve said yesterday in a report that highlighted concerns that the economy may be growing too rapidly.</br></br>The Fed's latest survey of economic conditions around the country, compiled from reports from its 12 regional banks, found only scattered signs of mounting wage pressures and little evidence of rising inflation in general.</br></br>"Widespread labor shortages persist in virtually every district, but there have been only scattered reports of acceleration in wages," the Fed survey said. "There are some reports of accelerating prices-- largely related to home construction--but there is no evidence of any broad-based pickup in consumer price inflation."</br></br>The Fed survey, known as the beige book for the color of its cover, will be used by Fed policymakers when they next meet Aug. 24 to review interest-rate policies.</br></br>There has been a growing concern in financial markets that the central bank will boost interest rates for the second time this year because of growing fears that inflation will take off if economic growth does not slow.