WASHINGTON—The Federal Reserve's Beige Book shows the U.S. expanded at a modest pace throughout August, even in the face of uncertainty related to trade policy and tariffs.
However, NAFCU's Curt Long said he believes the threat of a recession will be sufficient for the Federal Open Market Committee to cut rates another 25 basis points later this month.
"The economy is facing headwinds from a number of directions, most notably those involving trade and manufacturing," said Long, NAFCU's chief economist and vice president of research. "While the labor market and consumer spending are strong enough at the moment to keep growth in positive territory, it is slowing."
In addition, reports on consumer spending were not as positive although auto sales did grow modestly since the last report. The Fed said that employment and wages grew modestly, on pace with previous reports.
Other Data
Other data points in the Beige Report worth noting, according to Long:
- Transportation activity softened in the last quarter which was largely attributed to slowing global demand and heightened trade tension
- Home sales remained constrained largely due to low inventory while new home construction remained flat
- Overall manufacturing was down from the previous report
- Prices increased modestly since the last report
Access the full Beige Book here.