The U.S. economy showed some signs of rising wage pressures in September and early October but overall compensation growth remained modest, the Federal Reserve says today, a further sign of the cloudy outlook facing Fed policymakers as they mull a rise in interest rates.
“Wage growth held fairly steady at modest levels, although some districts reported rising pressure for certain sectors,” the Fed says in its Beige Book report of anecdotal information collected from business contacts nationwide.
The U.S. central bank also says that most districts reported a modest or moderate pace of economic expansion and that consumer spending was mixed.
Policymakers have been keenly watching for signs of increasing wage pressures spurred by an unemployment rate that now stands at 5%.
After its policy meeting in September, the Fed indicated it would likely raise its benchmark interest rate by the end of the year providing employment and inflation continue to strengthen.
Inflation has been stubbornly slow to rise. In its report, the Fed notes that overall price growth remained mild, despite tight labor market conditions across most districts.
