Fed's Beige Book reports positive outlook, despite trade uncertainty

The U.S. economy expanded at a modest pace from mid-May through early June, with little change from the prior reporting period, according to the Federal Reserve's Beige Book.

Almost all of the Fed’s 12 districts reported some gains over the past few months, the Fed said in its region-by-region roundup of anecdotal information known as the Beige Book. The report, prepared by the Federal Reserve Bank of St. Louis, was based on information collected through July 8.

“The outlook generally was positive for the coming months, with expectations of continued modest growth despite widespread concerns about the possible negative impact of trade-related uncertainty,” the report said.

Despite the relatively healthy economy, Federal Reserve Chairman Jerome Powell suggested the central bank is poised to cut interest rates during the upcoming FOMC meeting, which will end on July 31. Wall Street is currently pricing in a 100 percent chance of easier monetary policy, with most traders forecasting a 25 basis point cut.

Still, manufacturing production remained generally flat, with some firms in the Northeast reducing their number of workers. Tariff uncertainty and trade policy continued to weigh on the industry.

Employers also continued to complain about the tight labor market and the lack of available workers. Contacts across the country experienced difficulty filling open positions, particularly in construction, information technology and health care.