MNI BRIEF: Fed Beige Book-Weaker Labor Demand, Spending

Demand for labor among U.S. employers weakened and consumer spending declined in recent weeks while price pressures appeared to moderate, according to the Federal Reserve's latest Beige Book released Wednesday. 

"Employment declined slightly over the current period with around half of Districts noting weaker labor demand. Despite an uptick in layoff announcements, more Districts reported contacts limiting headcounts using hiring freezes, replacement-only hiring, and attrition than through layoffs," the report said. 

"Prices rose moderately during the reporting period. Input cost pressures were widespread in manufacturing and retail, largely reflecting tariff-induced increases," the Fed added. "Prices declined for certain materials, which firms attributed to sluggish demand, deferred tariff implementation, or reduced tariff rates. Looking ahead, contacts largely anticipate upward cost pressures to persist but plans to raise prices in the near term were mixed." 

The Fed meets next month and is increasingly seen as likely to cut rates another quarter point to prevent further weakening in employment.  (See MNI INTERVIEW: Fed's Risk-Management Cuts Not Enough-Revelio)