WASHINGTON—There were modest increases in economic activity in the 12 Federal Reserve Regions from early April through late May, according to the latest analysis released by the Federal Reserve Beige Book.
"Despite the mediocre pace of economic expansion, the Fed is likely to raise rates by a quarter point in June," said Curt Long, NAFCU's chief economist and director of research. "But the forecast for the second half of the year is far more uncertain. Weak inflation and potential congressional bickering over the debt ceiling could delay future rate hikes and the Fed's anticipated unwinding of quantitative easing."
The labor market continued to tighten, with most districts citing shortages in a growing number of occupations. Non-auto retail sales saw little change, while auto sales decreased slightly from last year's record highs, Long noted.
The construction of new homes and nonresidential structures grew modestly while sales of existing homes increased as well, he said.
As CUToday.info reported, Long stated that Federal Reserve Board Gov. Lael Brainard's recent comments on the federal funds target rate indicate a June rate hike is likely.