Fed’s Beige Book finds wage increases ‘flat to moderate’, price increases ‘minimal’
WASHINGTON—Wages and prices remained subdued in most of the U.S. through the first week of the year, according to a survey of economic conditions, a discouraging signal for Federal Reserve officials grappling with the threat of persistently weak inflation to economic growth.
While the jobs market continued to improve moderately, wage increases were “flat to moderate, while price increases tended to be minimal” from late November through Jan. 4, the Fed’s beige book found.
The findings come two weeks ahead of the Fed’s next policy committee meeting. Central bankers have said repeatedly that inflation should pick up as joblessness falls and slack in the economy diminishes. But recent economic data have given few indications that inflation, which has fallen short of the Fed’s 2% goal for 3½ years, is back on track.
Chicago Fed President Charles Evans said earlier Wednesday that central bankers “have not done well” in terms of getting inflation to desired levels. Mr. Evans, who held a voting role on the interest-rate-setting Federal Open Market Committee in 2015 but won’t this year, reiterated Wednesday that he wants the Fed to raise short-term interest rates slowly given concerns about weak inflation.
