WASHINGTON – U.S. business activity continued to expand from mid-April through May, and overall price pressures were moderate, although some regions reported rising costs for fuel and building materials, the Federal Reserve (search) said Wednesday.
"Reports from all twelve Federal Reserve Districts indicate that business activity continued to expand from mid-April through May," the Fed's "beige book (search)" summary of economic conditions said.
Most districts characterized the pace of economic expansion as moderate, solid or well-sustained, the Fed said. However, the Philadelphia district said tile Boston and Cleveland reported unevenness across sectors of their regions' economies.
Price pressures were modest, but policy makers in some areas expressed concern about costs for some inputs, the central bank said.
"Overall price pressures were moderate, but several reports noted concern over high fuel, transportation, and building materials costs," the Fed added.
Some districts said manufacturers were unable to pass along rising costs of their raw materials because of long-term contracts or foreign competition, the Fed said.
The Fed also said that some regions noted that high gasoline prices (search) were having a negative impact on retail sales.
Labor markets improved in most districts, the Fed said. Several reported difficulty finding specific types of workers, including skilled energy workers in the Dallas district and shortages of construction workers in Atlanta and San Francisco.
The Fed said residential real estate markets were strong in most districts, and several districts had seen improved commercial real estate conditions.
Demand for loans either increased or remained solid, and most districts reported increases in commercial lending activity, the Fed said.
Members of the Fed's policy-setting Federal Open Market Committee (search) will use the "Current Economic Conditions" report at their scheduled June 29-30 meeting, where they are widely expected to nudge interest rates up a quarter-percentage point for a ninth consecutive time.
The Atlanta Fed prepared the report based on information collected before June 6.