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The Fed: Inflation still high but easing Fed’s Beige Book finds, as recession fears grow

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Inflation eased a bit in the early fall, a Federal Reserve survey found, but prices were still rising rapidly while higher interest rates socked the economy and spurred more talk of recession.

The regular Fed survey, known as the Beige Book, painted a mixed picture of the economy. While the U.S. continued to expand “modestly,” pockets of weakness emerged in areas such as housing.

The survey covers the period of September through the first week of October.

Here are the key points from the report:


“Price growth remained elevated, though some easing was noted across several districts,” the Beige Book said. The U.S. has 12 Federal Reserve banks blanketing the country.

The declining cost of fuel, commodities and freight costs also raised expectations among businesses “for price increases to generally moderate,” the survey found.

Yet other businesses said high inflation was still pushing up wages and would continue to do so.

The increase in U.S. inflation in the 12 months ended in September stood at 8.2%. That’s down from a peak of 9.1% in June, but still near a 40-year high.

The Fed is rapidly raising interest rates to try to cut inflation to pre-pandemic levels of around 2%, a herculean task that raises the odds of recession.


The U.S. economy is growing but slowing.

Six regional Fed banks reported growth, four were flat and two saw declines — “with slowing or weak demand attributed to higher interest rates, inflation and supply disruptions.”

Retail spending was flat, auto sales were sluggish and the housing market was slammed by surging mortgage rates, the survey found.

Travel and tourism improved, however, and manufacturers held steady, the Fed said.


The labor market is still as tight as ever. Many companies were still hiring, the Fed said.

Yet some “businesses were hesitant to add to payrolls amid increased concerns of an economic downturn. There were also scattered mentions of hiring freezes.”

Meanwhile, wage growth “remained widespread,” businesses told the Fed. And higher pay was still essential “for retaining talent in the current environment.”


Worries about recession have increased, especially in the Boston, Chicago and Philadelphia regions.

“The outlook turned more pessimistic as recession fears spread,” the Boston Fed said.

Fed officials in Washington acknowledge their fight to reduce high inflation could spawn a recession. Higher interest rates slow the economy by raising the borrowing costs for consumers and businesses.

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