U.S. economy expanded, several regions see pickup in wage growth
Pay increased in all but one of the Fed's 12 regional bank districts and several reported signs of a pickup in wage growth, the U.S. central bank said in its Beige Book report of anecdotal information collected from business contacts nationwide.
The Fed has signaled caution in lifting interest rates this year as it waits to see if the nation's economy can shrug off slowing global growth and risks posed by a strong dollar and sustained period of low oil prices.
Stagnant wages have also hindered inflation, which is running below the 2-percent rate policymakers would like to see.
The report gave cause for both optimism and caution on the U.S. economic outlook. Consumer spending increased only modestly in most districts and while capital spending increased on balance, there was only scattered reports of spending for capacity expansion.
Manufacturing increased in most districts but expectations for future growth were mixed. One particular bright spot in the employment picture was the healthcare sector, which grew at a solid pace in a number of districts, the Fed said.
Boston, Cleveland and St. Louis Fed districts cited "sizeable" wage increases for jobs in information technology services, skilled construction and manufacturing. ■