MNI: Economy Mixed, Price Rising Amid Tariffs- Fed Beige Book

U.S. economic activity was mixed in recent weeks and prices climbed as businesses reported a surge in uncertainty following the announcement of larger-than-expected tariffs this month, the Federal Reserve said in its latest Beige Book report released Wednesday. 

"Economic activity was little changed since the previous report, but uncertainty around international trade policy was pervasive across reports," the report said. "Most Districts saw moderate to robust sales of vehicles and of some nondurables, generally attributed to a rush to purchase ahead of tariff-related price increases."

Prices increased across Fed districts, with six describing characterizing price growth as modest and six as moderate, similar to the previous report. 

"Most Districts noted that firms expected elevated input cost growth resulting from tariffs." (See MNI INTERVIEW: Fed Needs More Hawkish Message - Emmons)  

"Many firms have already received notices from suppliers that costs would be increasing. Firms reported adding tariff surcharges or shortening pricing horizons to account for uncertain trade policy. Most businesses expected to pass through additional costs to customers. However, there were reports about margin compression amid increased costs, as demand remained tepid in some sectors, especially for consumer-facing firms."