The nation's economy was growing at a moderate pace in the past two months, with little sign of any inflation pressures, according to a survey of regional business conditions by the Federal Reserve.
The survey by the Fed's 12 regional banks showed all districts except New York were sharing in the expansion, including varying degrees of manufacturing strength in nine of the regions. Most districts reported gains in retail sales."Price increases remained generally subdued, and there were only scattered reports of wage pressures despite continued tight labor markets and somewhat stronger economic growth," the survey summary said Wednesday.
While the prices of gasoline and some food products have been surging in recent weeks, the central bank in this report took the view that the spurt was likely to be temporary and not lead to an overall inflation spiral.
This view could have a calming effect on financial markets, which have been unsettled in recent weeks by the jump in energy and commodity prices.
The survey, known as the Beige Book, will be used by Fed policy-makers when they meet May 21 to consider interest rates.
Wednesday's report, with its benign view of inflation, likely will increase expectations that the central bank will leave interest rates unchanged for now.